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Participant ○○○

Oil Anyone?

Oil seems to have bottomed. Can't really see it dropping more, unless the world economies fall into depression from inability to manage the virus and restart. 

So there are a few CEF in this area that interest me. Maybe others interest you. 

MIE

BGR

NRGX

NRGX and BGR seem to have very little leverage. So that could be good. 

BGR has cut its dividend twice already this year. From $0.0776 to $0.068 and now down to $0.047. These are monthly distribution amounts. That translate to around 7.8% yield. Will they cut more? If oil stabilizes, will they increase their dividend?

NRGX is that strange hybrid that PIMCO created. Quarterly dividend of $0.40 has been paid. At current prices, that's a 21% yield. But it's not all oil, so it has the ability to make money from the financial side of the portfolio. Even a cut to $0.20 would be a 11% yield. Not much of a performance history. But it is PIMCO. So there's that. 

MIE got crushed and also cut its dividend twice. Starting at $0.077 to $0.066 in January and now down to $0.015 for the last three months. With a share price of $2.10, that's a 8.5% yield. 

I'd rather steer clear of the highly leveraged MLP players. Which is why NRGX and BGR seem interesting. 

Thanks for your feedback. 

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Highlighted
Contributor ○○

Re: Oil Anyone?

Overall I agree with your thinking, astro.   For oil, we may not be out of the woods yet, so I'd go only with the biggest of the mega-caps:  CVX, COP, TOT, XOM, or there's etf FILL.   They all pay you to wait.

I have also had luck with mlps recently and I still do like NRGX.  However with the CEFs I have to keep reminding myself that their distributions are largely illusiory.   They pay out far more than they earn.    Having been seriously burned by SZC some time back, it will take some serious seduction to entice me back to it or to BGR etc.   I like some of the specialty shippers like KNOP and preferreds DLNGpA, GLOPpA. There are others. PSX is big & interesting, IMO, though I don't yet own it.   Good luck.

 

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Participant ○○○

Re: Oil Anyone?

@richardsok 

Yeah, I've been burned by CEFs too, especially recently with the crash. I think it's the leverage that makes the drops so much more extreme. 

Both NRGX and BGR are very light on leverage. So that to me makes them more attractive. 

BGR also has a portfolio that includes many of the big boys in the industry, and a 8% yield is certainly more reasonable than some CEFs out there. 

And NRGX does a good job of disguising what they actually have in their portfolio. 

I'm starting to lean towards those two. MIE has 60% leverage, so that could be challenging. Or rewarding as the case may be. 

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Frequent Contributor

Re: Oil Anyone?


@astrokng wrote:

Oil seems to have bottomed. Can't really see it dropping more, unless the world economies fall into depression from inability to manage the virus and restart. 

So there are a few CEF in this area that interest me. Maybe others interest you. 

MIE

BGR

NRGX

NRGX and BGR seem to have very little leverage. So that could be good. 

BGR has cut its dividend twice already this year. From $0.0776 to $0.068 and now down to $0.047. These are monthly distribution amounts. That translate to around 7.8% yield. Will they cut more? If oil stabilizes, will they increase their dividend?

NRGX is that strange hybrid that PIMCO created. Quarterly dividend of $0.40 has been paid. At current prices, that's a 21% yield. But it's not all oil, so it has the ability to make money from the financial side of the portfolio. Even a cut to $0.20 would be a 11% yield. Not much of a performance history. But it is PIMCO. So there's that. 

MIE got crushed and also cut its dividend twice. Starting at $0.077 to $0.066 in January and now down to $0.015 for the last three months. With a share price of $2.10, that's a 8.5% yield. 

I'd rather steer clear of the highly leveraged MLP players. Which is why NRGX and BGR seem interesting. 

Thanks for your feedback. 


Howzabout the unleveraged MLP ETF, AMLP?  It recently cut it's distribution last week, to $0.15/quarter yielding, forward, 12.5%.

ElLobo, de la casa de la toro caca grande
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Contributor ○

Re: Oil Anyone?


Both NRGX and BGR are very light on leverage. So that to me makes them more attractive. 

NRGX has a lot of leverage but sources like the PIMCO web site and cefconnect.com exclude it because it's primarily in the form of total return swaps on MLPs rather than traditional senior securities.

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Participant ○○○

Re: Oil Anyone?

@acamus 

I'm not surprised. And again, PIMCO does a great job of disguising their portfolios. 

That adds a check to the BGR column. Less leverage and more along the big oil/gas producers. 

Maybe try BGR and see what it does. Hope they don't cut their distribution again. 

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Contributor ○○

Re: Oil Anyone?

There is a BoA report

MLP Closed-end funds
Leverage concerns addressed, but NAV discounts may take time to close
by Derek Walker et al.
12 May 2020 04:13PM EDT

...

For midstream/MLP CEFs, we acknowledge wide NAV discounts and efforts
by fund managers to address leverage concerns. That said, we look for
a clearer recovery trajectory before becoming more constructive of
midstream/MLP CEFs, thus we reiterate our F-3 ratings for each fund
under coverage.

************************************************************

I don't know what an F-3 rating is, although it's not a straight Buy. The BofA site says

BofA Global Research Stock Rating

Fundamental Equity Opinion Key: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating.

VOLATILITY RISK RATINGS, indicators of potential price fluctuation, are:

A - Low
B - Medium
C - High

INVESTMENT RATINGS reflect the analyst's assessment of a stock's:
absolute total return potential and attractiveness for investment
relative to other stocks' within its Coverage Cluster (defined below).
There are three investment ratings:

1 - Buy (stocks are expected to have a total return of at least 10% and are the most attractive stocks in a coverage Cluster),
2 - Neutral (stocks are expected to remain flat or increase in value and are less attractive than Buy rated stocks)
3 - Underperform (stocks are the least attractive stocks in a Coverage Cluster).

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Frequent Contributor

Re: Oil Anyone?

       I’ll add TPZ to the confusion. Energy not confined to a monopoly of a handful of oil companies. A leveraged CEF concentrated in MLP’s currently yielding 17%+. I don’t think the need for energy is going to change in my remaining lifetime. Being a retiree times a wastin. As always expect no growth in principle value. Cash flows in once per month, professionally managed and my work is the spending part.
       
        Right up your alley El.

 

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Participant ○

Re: Oil Anyone?

Does it matter that oil has bottomed?   The big number is the price needed for companies to make pay expenses and pay adequate dividends.   That is $45-$50.  I think the carnage in the "oil patch" has yet to come as bankruptcies and dividends cuts are bound to increase.  Oil is a trade right now.....not a long term investment.   Trade at your own risk.  


@astrokng wrote:

Oil seems to have bottomed. Can't really see it dropping more, unless the world economies fall into depression from inability to manage the virus and restart. 

So there are a few CEF in this area that interest me. Maybe others interest you. 

MIE

BGR

NRGX

NRGX and BGR seem to have very little leverage. So that could be good. 

BGR has cut its dividend twice already this year. From $0.0776 to $0.068 and now down to $0.047. These are monthly distribution amounts. That translate to around 7.8% yield. Will they cut more? If oil stabilizes, will they increase their dividend?

NRGX is that strange hybrid that PIMCO created. Quarterly dividend of $0.40 has been paid. At current prices, that's a 21% yield. But it's not all oil, so it has the ability to make money from the financial side of the portfolio. Even a cut to $0.20 would be a 11% yield. Not much of a performance history. But it is PIMCO. So there's that. 

MIE got crushed and also cut its dividend twice. Starting at $0.077 to $0.066 in January and now down to $0.015 for the last three months. With a share price of $2.10, that's a 8.5% yield. 

I'd rather steer clear of the highly leveraged MLP players. Which is why NRGX and BGR seem interesting. 

Thanks for your feedback. 


 

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Participant ○○○

Re: Oil Anyone?

F-3 means "underprform" (i.e. "sell" before the times of political correctness), the lowest rating.
JR

************************************************************

I don't know what an F-3 rating is, although it's not a straight Buy.


 

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Frequent Contributor

Re: Oil Anyone?


@sugarhill6 wrote:

Does it matter that oil has bottomed?   The big number is the price needed for companies to make pay expenses and pay adequate dividends.   That is $45-$50.  I think the carnage in the "oil patch" has yet to come as bankruptcies and dividends cuts are bound to increase.  Oil is a trade right now.....not a long term investment.   Trade at your own risk.  


@astrokng wrote:

Oil seems to have bottomed. Can't really see it dropping more, unless the world economies fall into depression from inability to manage the virus and restart. 

So there are a few CEF in this area that interest me. Maybe others interest you. 

MIE

BGR

NRGX

NRGX and BGR seem to have very little leverage. So that could be good. 

BGR has cut its dividend twice already this year. From $0.0776 to $0.068 and now down to $0.047. These are monthly distribution amounts. That translate to around 7.8% yield. Will they cut more? If oil stabilizes, will they increase their dividend?

NRGX is that strange hybrid that PIMCO created. Quarterly dividend of $0.40 has been paid. At current prices, that's a 21% yield. But it's not all oil, so it has the ability to make money from the financial side of the portfolio. Even a cut to $0.20 would be a 11% yield. Not much of a performance history. But it is PIMCO. So there's that. 

MIE got crushed and also cut its dividend twice. Starting at $0.077 to $0.066 in January and now down to $0.015 for the last three months. With a share price of $2.10, that's a 8.5% yield. 

I'd rather steer clear of the highly leveraged MLP players. Which is why NRGX and BGR seem interesting. 

Thanks for your feedback. 


 


I have heard that 32 is break even for large producers. Only 6 of 76 US oil producers Are profitable at 25.

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Contributor ○○

Re: Oil Anyone?

BoA report by Derek Walker et al. 10 June 2020 06:00AM EDT
MLP Closed-end funds
NAVs improving on recovery optimism; Upgrade CEM and KYN to Neutral
Upgrade CEM and KYN to Neutral

...

On average, current NAV discounts are ~2x wider than 1-yr historical
discounts. With leverage concerns addressed, revised dividend payouts
and a decrease in broad market volatility, we believe the focus shifts
to relative NAV discounts, quality of underlying fund earnings power
and sustainability of current dividend yields. Based on these factors,
we upgrade CEM and KYN to Neutral (F-2) from Underperform (F-3) and
reiterate our F-3 rating on FMO, GMZ and TYG.

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Follower ○○

Re: Oil Anyone?

I was adding RDS-B and XOM in March, but I will trim some of them to re-balance their percent in my portfolio.


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Explorer ○○

Re: Oil Anyone?

Beliavsky ....

 Your: Based on these factors, we upgrade KYN to Neutral

 I believe KYN has been a buy for a while now [IMHO]. My data shows KYN currently has a 94 report card grade, a very good Rf [risk factor for for portfolio's] of +0.816 with a current dividend of 10.47% [COB Friday]. My analytical data shows a "BUY NOW" with the numb3rs showing 1786/2738 [1500/2000 is start of Buy signals]....

 Add to this that KYN has had recent insider buying at 6.14 for 15,000sh on 6/10/20. We have to remember that KYN got hit very hard MktPrc collapsed to $1.00 during the oil crisis in the oil sector. KYN has performed very well with their current NAV of 6.91 [at a current discount]....

Disclosure: Some of us currently have a position in KYN....

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