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10/27/22 Capitalist Times Live Chat
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AvatarRoger Conrad
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Hi everyone and welcome to this month's live web chat. We very much appreciate your participation and look forward to a lively round of questions today.
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As always, there is no audio. Just type in your questions and Elliott and I will get to them as soon as we can concisely and comprehensively. There will be a complete transcript of all the Q&A posted to our websites, and we will be sending you a link to it shortly after we sign off--which will be after all the questions in the queue are answered, as well as those we received prior to the chat by email.
I'd like to get started with some of those pre-chat answers:
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Q. Hi Roger. I will be harvesting tax losses shortly. In particular Kinder Morgan Inc (NYSE: KMI)—long time holding which has swung from meaningful losses to some gains and back to total loss. Want to stay in the sector, so thinking of immediately using proceeds to build a position in Magellan Midstream Partners (NYSE: MMP), or buy KMI back hopefully at a Dream Price after 30 days, even given its history with me? I have a much larger position in Enterprise Products Partners (NYSE: EPD).
 
I have a similar situation with Verizon Communications (NYSE: VZ), my largest portfolio holding. I am looking to spread tax lot loss proceeds around to stocks on my Dream Price/Buy Below list—or stay the course given it’s high yield and already huge decline? Note:
I always reinvest dividends in all holdings. Much appreciate your advice over many years beginning with the Personal Finance days. Regards—Rick R.
 
A. Hi Rick. Personal Finance does go back a ways. Thank you for coming to us and staying with us all these years.
 
I featured Kinder Morgan in the Energy and Income Advisor issue that just posted yesterday. It’s the only company in our Model Portfolio that does trade below the long standing Dream Buy price we’ve set, despite continued steady operating results and modest dividend growth. As I highlight in our Feature article Roundtable, Q3 was another quarter of rising cash flow, debt reduction, conservative but meaningful CAPEX including on acquisitions, low cost capital raising and stock buybacks—
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with management now expected to accelerate the remaining $1.3 billion under its $2 billion Board authorization.
 
Looking ahead, Kinder’s pipelines and other assets appears to be particularly well positioned for the growth of LNG exports as well as low carbon fuels in North America. LNG growth is primarily pipelines and gathering systems in Louisiana and Texas that will feed the liquefaction facilities, which require longer lead times to site, permit and build and therefore involve greater risk. Low carbon fuels include so-called “renewable natural gas” harvested from landfill and farms that can use the same infrastructure conventional gas does now. And the company’s CO2 unit appears likely to be a leader in carbon capture, transportation and storage as well.
 
Bottom line, I think shares will eventually take out the 2015 high point of roughly $45 at some point during this energy super cycle. And I intend to continue recommending its growing 6% plus yield, which would be very safe even in a severe recession.
Kinder has returned a little over 19% this year including dividends.
 
Verizon is facing a few more headwinds this year than Kinder. The biggest is in an environment of rising inflation and higher interest rates with the threat of recession looming, consumers have been so far unwilling to pay meaningfully more for applications now possible with 5G and enhanced fiber broadband networks.
 
This is of course a challenge to the entire industry. But as the largest US wireless company, Verizon has been particularly scrutinized on customer trends. And compared to T-Mobile US especially, it has lagged regarding additions. On the plus side, Verizon is easily the best positioned for growth from 5G enterprise and industrial applications in the US. And in fact, that’s where the revenue growth from 5G has come from elsewhere in the world, with China’s Big 3 and Japan’s NTT leading the way. In contrast to consumer applications, industrial 5G
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enterprise and industrial applications in the US. And in fact, that’s where the revenue growth from 5G has come from elsewhere in the world, with China’s Big 3 and Japan’s NTT leading the way. In contrast to consumer applications, industrial 5G helps adopters to save money with enhanced automation—which means businesses are much more willing to pay as they can more than make it up with enhanced productivity and lower costs. And from a price of 7.3 times expected next 12 months earnings and a safe and growing yield north of 7%, this stock despite greatly lagging has I think more than enough potential for me to stay with it.
 
Your question is would this be a good time to sell to take a tax loss with the idea of either moving to an alternative or coming back in after 30 days, to avoid the wash rule. Any recommendation we would give would depend heavily on your personal circumstances, which we can’t give out in this forum.
 
What I can say is we believe the risk of a recession has risen substantially since the
beginning of the year, and that the danger will continue to weigh heavily on stock prices. Bottom line is we’re not expecting to see lagging stocks run to new highs in the next few months, even those we like for the long term and believe to be very solid businesses already selling at bear market valuations. We are in a building positions mode when stocks get cheap enough but only incrementally at this point—as noted by specifics in our advisories.
 
 
Q. Hello Elliot and Roger,
I would appreciate hearing your thoughts on Petroleo Brasil (NYSE: PBR) and Vermilion Energy (TSX: VET, NYSE: VET). PBR has greatly increased its dividend payment amounts and thus its yield in the last six months or so. Some say it’s because the Brazilian government owns 37% of the shares and a majority of the voting interest.
 
VET has natural gas production in the east Mediterranean area, which should be in increased demand from Europe to replace their recent loss of access to gas from Russia.
You used to have it in the Energy and Income Advisor table for Canada and Australia as recently as September 28, 2022 as mentioned in your chat at that time. I couldn’t find it when I last checked. Was it dropped? Best regards.—Bob T.
 
A. Hi Bob. We recently modernized our Energy and Income Advisor website to make it easier for members to use. And before I answer your question, we’re very interested in what you and other readers think of the changes.
 
Regarding Vermilion, it’s still in our Canada and Australia coverage universe. You can get to it by clicking on the “Portfolios” tab at the top of the home page. Then click on Canada and Australia at the bottom of the menu list. Click on the down arrow on the left hand side at the top of the table to scroll down to Vermilion, which we rate a buy at 25 or lower. The company as you point out has very promising assets to serve European demand, including on the continent itself. Management has been able to successfully navigate anti-fossil fuel and anti-hydraulic
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fracturing sentiment and legislation and is in prime position as a result. That should be reflected in Q3 earnings and guidance due out November 9. I would also expect another dividend increase as the company works its way back to a payout closer to its pre-pandemic rate of 23 cents Canadian per month.
 
As for Petroleo Brasil, we track it in our Exploration & Production and Services coverage universe, which can also be found under the Portfolios tab. One reason for the hold recommendation is uncertainty regarding the aftermath of upcoming elections. The company derived 73% of its oil production from pre salt in Q3. That process depends heavily on government support, which has been strong under the current president but may not be if he loses re-election. Bottom line: We’d rather stick with the stocks in our Model Portfolio and High Yield Energy List. I would also not put much stock in the 33.4% yield being sustained.
 
 
Q. I’ve been reviewing my REIT investments and appreciate your monthly updates and
and current recommendations. It would be helpful if you would prioritize your existing recommendations in summary form on at the end.
 
The extensive REIT sheet has great coverage but I have trouble finding it when I search for it. The last one I found looks to be updated as of July. I recognize how hard it is to keep that current but maybe have a link on monthly communications to the latest one. My question for the chat is: would you prioritize your REIT recommendations for new money going forward? Thanks.—Donna R.
 
A. Thanks Donna for that excellent suggestion. I’m glad you’re finding the REIT Sheet useful. But I still consider it to be an advisory in progress, so please continue to offer suggestions.
 
Regarding prioritization of recommendations, I do now feature a focus stock for conservative readers and one for more aggressive readers. And they are my favorite picks for fresh money every month. Also, we publish the full REIT Sheet coverage universe table every three months, most recently in September.
The next will be in December.
 
 
Q. Appreciate your guidance. Since diesel is the delivery fuel for everything, can we expect prices to stay in this range for the foreseeable future? Thank you.—Jim J.
 
A. Hi Jim. As with oil, natural gas, gas liquids and all refined products, demand in the near term will be heavily impacted by the economy. And if the Federal Reserve does push us into recession to fight inflation, the price of everything including diesel is likely to drop in the near-term.
 
Our contention, however, is the current energy super cycle is being powered by supply considerations, just as the past decade’s down cycle was. And depressing demand temporarily by crashing the economy will, if anything, tighten that side of the equation by further shrinking investment from already subdued levels. So when the Fed inevitably declares victory over inflation and stops tightening, demand will return at a time when supply is even more compressed, and prices will move to new highs.
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That’s incidentally pretty much what happened in the late 1960s when Fed Funds was jacked up from 3% plus to over 9%, then again in the early 1970s when it went from 4% to 13%--and even in the late 1970s when the Volcker Fed went from 4% to 20%. The Fed raised, the economy contracted and energy demand and prices fell temporarily. Then they backed off, demand returned with supply even more contracted by lack of investment.
 
Only investment ended that energy super cycle. And that will be the case this time as well.
 
 
 
Q. Roger. I've been a long time investor in Dominion Energy (NYSE: D. I live in Virginia and am worried about Dominion's new offshore wind project being as big a boondoggle as the failed Atlantic Coast Pipeline. The political climate has changed, and although Dominion still has a
powerful lobbying effort, I don't think there's "Blank Check" mentality for cost overruns on the wind project with the legislature or the SCC. If this project goes off the rails financially or doesn't deliver as much electricity as cheaply as advertised I believe Dominion and its investors will be holding a very large, very empty bag. Please allay my fears, I'd love to buy more below the Dream Price of 65.--Thanks for your time.—Tom T.
 
A. Shifting political winds have always been a challenge for utility companies to navigate. And for disclosure, I’m also a resident of Virginia and long-time shareholder of Dominion Energy, dating back to when I took advantage of a customer stock purchase program in the 1980s.
 
There are really two issues here. First, as you point out is the status of energy politics in Virginia. The attorney general elected in 2021 has raised questions about the state’s energy law, which requires decarbonization of Dominion’s electricity grid and generation with investment specifically pre-
approved by regulators before it’s spent. And while the utility still has substantial support on both side of the aisle in the legislature, it’s quite possible opponents of its influence in Richmond will try to make the plan an election issue when the state senate and house are up for election in 2023.
 
The second issue is the cost of offshore wind projects. This is not a new technology. And in fact, manufacturers like Vestas Wind continue to drive down costs and boost efficiency of components, even with the supply chain problems of the past couple years. But offshore wind is new in North America. And that means everything from siting and permitting to deployment is still far from routine.
 
Avangrid, for example, affirmed this week that its 800-megawatt capacity Vineyard project was on track to start generation next year. But it’s already requesting a higher rate for its Commonwealth project as a condition to continue development. Inflation impacts on labor and commodity costs are one factor. But soaring
cost of capital is almost certainly the biggest reason, even though the company has parent and 81.65% owner Iberdrola SA as a financial backstop.
 
Dominion, however, is relatively well shielded from both risks. Management may not be ultimately successful convincing Virginia regulators to soften the 42% annual capacity factor guarantee ordered in the original project approval. And if it’s not, we may see some scaling back of the project, which is currently 27% of expected CAPEX needed to fund 6% earnings and dividend growth through 2026.
 
Financial risk to the utility, however, is actually quite low at this point. That’s because this is a utility rate-based project where investment is pre-approved and immediately recovered in special “rate riders.” There is no spending for regulators to later disallow. The Atlantic Coast Pipeline, in contrast, was an unregulated project with no pre-recovery of costs. So when Dominion and its partners cancelled it, they had to write the whole thing off.
 
We’ll get an update
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on costs when Dominion announces Q3 results and updates guidance November 4. But so far, the company appears to have largely locked them in with contracts. And they’re in process of building what will be the first offshore wind construction vessel in the US, which will allow ratepayers to recoup costs as it’s rented to other developers.
 
If Dominion were forced by politics to walk away from its offshore wind project, there’s still plenty of potential CAPEX. That includes grid enhancements as energy-intensive businesses like data centers continue to move to Virginia. And regulators are now considering a new batch of 500 megawatts of solar and 300 MW of storage to be completed through 2025. The proposed facilities would add 38 cents to average monthly residential customer rate base but likely save multiples of that in fuel costs—as cancellations of needed pipelines like Atlantic Coast and possibly Mountain Valley continue to crimp available natural gas supplies.
 
Ultimately, this company must continue to
execute its strategy. But it has a strong track record of doing that and maintaining good relations with the state government. So long as that’s the case, I’ll be staying with the stock.
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Q. Hello Roger. I have been a subscriber for many years and one of the reasons is that your commentaries have always been very balanced. Lately, Capitalist Times has sent a series of emails that seems to indicate a lot of doom and gloom. Can you comment?—Pamela
 
A. Hi Pamela. Unfortunately, there is considerable risk in the current stock market, and I would add especially for those who invest indiscriminately through index funds and ETFs—basically buying the basket in hopes a rising tide will raise all boats as it does typically in bull markets.
 
The action in stocks this year, and even more so with bonds, is pretty classic bear market. And we believe there’s a strong likelihood of more downside for both, with the Federal Reserve jacking up interest rates to quell inflation.
 
That doesn’t mean it’s time to run for the hills. In fact, the one investment guaranteed to lose in an inflationary environment is cash—while the most likely to win is a well-chosen portfolio of stocks. But it does mean that the
passive investment strategies that worked pretty well from early 2009 through late 2021 are likely to be big losers over the next several years.
 
The emails you’ve been reading are basically making the broad point that it’s a time for active investing—choosing your own stocks and being willing to move around a bit when circumstances warrant. That’s been our philosophy actually for some time. And I will say that the stocks we’ve featured in Energy and Income Advisor this year are a pretty good example of needed contrary thinking combined with a lot of hard work looking for the best in class companies.
 
 
 
Q. Dear Roger, I’ve been using the recent weakness in Brookfield Energy Partners (TSX: BEP-U, NYSE: BEP) to reinforce my position, which I started over a decade ago on your recommendation. Thank you. I was somewhat stunned to see the recent announcement that BEP (with partners) would buy out Westinghouse (essentially from its parent, Brookfield), folding in a nuclear services and construction platform.
I view nuclear as a key part of reducing carbon emissions now and in the coming decades, so I don’t object practically, ethically etc. But nuclear is far more politically complicated, and Westinghouse went bankrupt in 2017 for reasons you’ve described for years now in following Southern Company’s (NYSE: SO) long debacle advancing the Vogtle project. Building new nuclear does not seem to have predictable timelines from planning through deployment.
 
What do you think? Inspired buy-low timing, or an unusually risky move by BEP? I thought their recent narrative was that there is so much renewables demand that they had no shortage of opportunities to smartly deploy capital.—Dan N.
 
A.Hi Dan. For anyone who hasn’t yet heard, Brookfield Renewable is teaming with several “institutional partners” and uranium miner Cameco (NYSE: CCJ) to buy Westinghouse Electric. The approximate cost is $2.3 billion for the 51% stake to be owned by Brookfield and its partners, and $2.2 billion for Cameco’s 49%. The deal also
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includes roughly $3.375 billion in entity level debt, which will be ring-fenced from the buyers.
 
In the post-announcement briefing, Brookfield and Cameco highlighted Westinghouse’s “approximately 85%” of revenue from “long-term contracts” and “highly recurring customer service” with a “nearly 100% retention rate.” That suggests the parties were attracted to reliable, recurring cash flow as much as they were their expectation that nuclear power would “see significant growth driven by energy security and decarbonization trends.”
 
Westinghouse is expected to generate approximately 4% of Brookfield’s distributable cash flow in 2023, based on a 17% net ownership including its partners’ shares. That plus ring-fencing of debt and stability of Westinghouse cash flow induced credit rater Fitch to affirm Brookfield’s BBB+ credit rating with a stable outlook this week. The rater also noted that 87% of the company’s cash flow is fully contracted through 2023, with a weighted contract life of 14 years and 70% indexing
to inflation.
 
The bottom line, though, is acquiring Westinghouse will actually have far less of an impact on Brookfield’s bottom line and balance sheet than the 9 gigawatts of power generation capacity it will bring on line through 2025. And there’s considerable upside from the low purchase price, particularly with Cameco as a partner.
 
As for Brookfield shares, the primary reason for the sharp decline especially since mid-September is concern that a higher cost of capital will derail its aggressive growth plans. The consensus opinion seems to be it will, though we’ve seen no evidence of that yet, with management taking advantage of lower prices to close several deals this year. I will be looking for assurance about the capital program in particular when the company releases Q3 results on November 4. But at this point, this looks like a cheap stock—including the C-Corp shares traded NYSE as BEPC. Insiders seem to agree in light of recent activity.
 
 
 
Q. Roger, Any thoughts why BCE Corp (TSX: BCE, NYSE:
BCE) has dropped so much? --RD
 
A. BCE’s NYSE listed shares are actually still relatively outperforming this year, despite a drop in the Canadian dollar/US dollar exchange rate from about 77.5 US cents to 72 cents—which has a commensurate negative impact on the US dollar value of BCE shares and its dividend when its converted into US dollars.
 
The Canadian telecom reports its Q3 numbers and updates guidance on November 3. But pretty much everything we’ve seen in terms of business developments points to a strong result, which in turn will support another mid-single digit percentage dividend increase early next year. The failure of the Rogers Communications/Shaw Communications merger to close to date—and for Quebecor to acquire Freedom Mobile—continues to give BCE an opportunity to extend its lead deploying 5G and fiber broadband service. And the media unit is also benefitting from the Canadian economy’s recovery from the pandemic.
 
As reasons for the decline, I would put the overall market front and center,
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with the Canadian dollar decline adding to the pain. But the franchise here looks very healthy. And I think the Canadian dollar will eventually be a positive.
 
 
 
Q. Roger. I am really intrigued with Algonquin Power & Utilities (TSX: AQN, NYSE: AQN). I started buying it based on your recommendations in March 2020 at $10/share and then more in Dec. 2020 between $15-$16/share. Then I added to it when it got below $14, then $13, then $12. Have purchased substantially more between $10 and $11. Why do investors treat it so poorly? It is a whopping 12% below your Dream Price of $12! What’s up with it? Thanks.—Barry
 
A. Hey Barry. Enjoyed our correspondence this month and thought I would answer this one
in the chat, as a number of readers may be wondering the same thing.
 
I think the most recent part of Algonquin’s decline (since early September) pretty much corresponds to the drop in the overall stock market, the nosedive in utility stocks that had to that point been in the black for the year, and the drop in the Canadian dollar—which was more a testament to the US dollar’s run-up against pretty much every foreign currency due to Federal Reserve interest rate increases.
 
Before that, however, there’s been the issue of Algonquin trying to close its acquisition of Kentucky Power from American Electric Power (NYSE: AEP). The company pre-funded this deal earlier this year, meaning it’s been carrying the cost of the additional equity (dividends) as well as debt to finance without the revenue of actually owning the asset. This actually became a big plus with the drop in the stock and bond market. But there’s been pretty consistent dilution as well, even as the company has been attempting to fund the rest of its
fairly aggressive CAD12.4 bil five-year CAPEX program.
 
As I noted in the October issue of Conrad’s Utility Investor as well as CUI Plus, Algonquin reached a revised deal to buy Kentucky Power in late September, under which it will pay $200 million less than under the original deal. This is to compensate for the potential economic impact of differing acquisition approvals from regulators in Kentucky and West Virginia. The company now expects to close in January, though it still needs approval from the Federal Regulatory Commission as seems highly likely. Management also announced a bit of capital “recycling,” selling a 49% interest in 551 megawatts of installed wind power and 80% of a wind facility in Canada with 175 MW. That will eliminate the need to issue new stock this year.
 
Algonquin will announce Q3 results and update guidance fully on November 11, at which time we should hear more about the Kentucky Power deal and get an indication of what dividend increase to expect next year. I’m encouraged by the
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recent upgrades from analysts as well as insider buying. But I would also repeat the admonition that we never want to really load up on any one stock, no matter how attractive it looks. This one does look like a steal from this price, as does the 7.75% mandatory convertible of June, 15, 2024 I’ve written about—which is now yielding 10.4% at its current price. But again, there are other stocks trading below Dream Buy prices now also—including Brookfield Renewable—and it’s always wise to spread your bets.
 
 
Q. Hi Roger. I hope all is well. In a recent chat, AES Corp (NYSE: AES) mandatory convertible AESC was mentioned, and I am intrigued. I am unfamiliar with preferred stocks, but I did well with your Centerpoint Energy recommendation last year. Am I missing something with AESC? It recently dropped as low as $79.83. It’s in the low 90s now.
But if it drops down to the mid-80s again, how would it not be a good deal with a 7% yield and a locked-in return of 10-15% return as of 2/15/24, or am I missing something?
 
I also attached two REIT offerings my JP Morgan banker sent me. I thought you might be interested in seeing what else is available in the REIT space: Blackstone Real Estate Income Trust and Starwood Real Estate Income Trust. I am going to pass, given the upfront fee and liquidity issues. Though, I understand I may be able to pick some up as a secondary buyer at a discount and avoid commission fees. Best Regards--Arthur H.
 
A. Hi Arthur. The risk with the AES preferred is it will convert into common stock on February 15, 2024. And the price will therefore follow the common stock price up and down. I’m bullish on AES at this price and ahead of earnings and guidance on November 4. But again this is not a conventional preferred stock—its value will follow the common stock price.
 
The primary appeal is obviously the dividend, particularly i
if the preferred’s price dips again. But again, AESC is basically a higher yielding way to play AES common stock—so keep that in mind.
 
My thought at this time for the November issue of CUI is to focus on the likely impact on regulation from the governors’ races this year. But these preferreds are again getting very interesting on price and I may have something to recommend then.
 
As for the two private issue REITs, I agree that I don’t see much appeal in chasing them at this time and paying the fees, when the entire REIT universe is actually looking pretty cheap. They may eventually be interesting, though until they have a trading history it will likely be difficult to accurately value them.
 
 
Q. Roger. Is there any specific reason for the utility sector sell off?--WCH
 
A. I tried to address this question in the October issue of Conrad’s Utility Investor and would encourage anyone interested in this question to check it out. The short answer is the we hit what Elliott has called a
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“sell everything moment,” when investors came to the belief en masse that even sectors holding up relatively well this year would sustain major damage from Federal Reserve actions.
 
I would say that the Dow Jones Utility Average is still only under water by about -6.8% year to date, which still compares well to -18.5% for the S&P 500. As I show in the October CUI issue, utility stock performance historically has not cratered in the face of Federal Reserve tightening. And sector fundamentals are still quite strong, including regulatory support for projects such as New Jersey’s OK this weeks of $1.1 billion of utility transmission projects.
 
That suggests when the Fed stops tightening and the stock market recovers that best in class utilities will be among the leaders. But equally, the near term could be quite choppy as risk of recession rises and investors retrench. That’s why I’ve chosen to recommend investors take an incremental
approach to building positions rather than a more aggressive all-at-once strategy.
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Q. Hey Roger, I didn't see Global Medical REIT (NYSE: GMRE) on your REIT Sheet. Do you cover them? I own Medical Properties Trust (NYSE: MPW) now and thought about selling some for tax loss, then add GMRE.—Eric
 
A. Medical Properties actually reported its earnings this morning. I’m still in the process of digesting some of the finer points. But I have to say the boost in 2022 normalized FFO guidance was encouraging and there seems to have been some real progress on answering some of the questions about tenant financial strength (Steward the big one) and the REIT’s ability to build a pile of cash without sacrificing profitability in a tough environment. Look for more detail in CUI Plus and REIT Sheet updates. But for now it looks like—despite the big decline in share price—that the dividend is well protected and the business plan is intact.
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Thanks for the suggestion on Global Medical. They are in pretty much the same business, with growth depending on their ability to make acquisitions at good cap rates (operating income as percentage of property value) and the ability of their tenants to stay current on rents. And like Medical Properties, their shares have taken a big hit this year on concerns about both issues in an environment of surging interest rates with a potential recession looming.
 
At this point, I intend to stick with Medical Properties as my pick in this space. But I will take a look at what Global reports on November 2 with interest. And in any case, I intend to add it to coverage. The next full REIT Sheet coverage universe table as I noted above will be with the December issue.
Thanks for those pre-chat questions everyone.
Guest
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AGLXY has been the worst performing equity investment in my portfolio.  Is it time to cut bait and just take the loss and move on?
AvatarRoger Conrad
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I still see a lot to like about AGL Energy long term--including an historically low valuation, but also the fact that it's still Australia's largest power generator--both fossil fuels and renewable energy--as well as its biggest energy retailer and distributed energy/rooftop solar company. And there's very strong shareholder activism to shake things up as well--which is unsettling sentiment now but ultimately means needed action will be taken.  Despite a very big hit to the Australian dollar (now under 65 US cents), the AGLXY ADR is at basically breakeven year to date, or up about 4.2% including dividends--that's after being up quite a bit earlier in the year. I still think it's at least double in the next few years. Taking a tax loss will make sense for some investors--but I would still be on the side of getting back in after 30 days avoiding the wash rule.
JerJos
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Hi Roger... MPW looks to be out-of-the-woods. Your thoughts. Thanx in Advance.
AvatarRoger Conrad
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Hi Jerjos. As I commented in one of the pre chat questions, Medical Properties reported its Q3 results today and actually was able to increase the mid-point of its 2022 normalized FFO per share guidance. I'm still looking over the numbers and digesting the earnings call today. But I would definitely agree that the REIT's business has been quite steady--and a massive contrast with the share price. To be sure, MPW isn't alone in the medical building net-lease REIT sector in taking a big share price hit this year. In fact, Global Medical mentioned in that question is also down about -50% year to date. But what I've found to be the case consistently in my career is battered income stocks that hold and increase dividends while sticking to business plan will always recover. The sell signal for MPW this time would have been a haircut in that guidance or a sign of worsening credit for tenants. That hasn't yet happened, so I'm sticking with it despite the paper loss.
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