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October 2026 Capitalist Times Live Chat
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AvatarRoger Conrad
1:42
Welcome to the CT live webchat for October. As always, there is no audio. Just type in your questions and we’ll get to them as soon as we can concisely and comprehensively. We will send everyone a link to a transcript of the complete Q&A tomorrow morning, should anyone need to leave the chat before their questions are answered.
 
A lot has happened over the last month in the stock market. And we’re getting into the thick of Q3 earnings reporting and guidance updates as well. We look forward to a lively discussion with all of you today. Let’s start first with some from the email bag.
 
1:43
 
Q. Roger, NRG has come back quite a bit. Any thoughts about an entry point?—W.W. Willy

A. I prefer Vistra Corp of the three large independent power producers I currently track. The business has plenty of leverage to Texas' power demand. growth. But the company also has nuclear power (NRG does not). And it's a leader in battery storage in the US, which probably has the biggest. ramp-up potential the next 3 to 5 years of any energy source.

NRG like Vistra will likely report very strong Q3 results next month. Commodity prices have been strong. And  management has been executing on asset expansion as well as cost control. Both stocks are also getting more interesting on price--for some reason people seem to be
doubting the electricity demand growth theme even as they're still convinced AI stocks are going higher. I have a Dream Buy price in CUI
of 90 for NRG and it's getting close. I will be updating my opinion in
the November issue after they post Q3 results.
1:44
Q. Hello Roger,

I am experiencing a prolonged delay with the delivery of Shell shares from their acquisition of ARC Resources. Have you heard anything from other subscribers or your personal experience on why this is taking so long? Speaking with E*Trade apparently Citibank will be delivering the new shares to holders in the States via the ADR settlement administrator in the UK -Crest. I thought I read a question on the last chat where someone already
had possession of SHEL shares. This seems like it is taking a long time. Do you have any further insights? As always, I appreciate all that you and the CT team do for us!—Fred L.
1:46
 
A. Hi Fred

Those shares should have been delivered to you by now. The close was Sept 2. So you should have seen the Shell shares as well as the cash in your account as of September end-month statements.

From what I've read, some US shareholders have experienced a processing delay. And the reason cited is some discount brokers like unfortunately E-Trade don't have a direct connection to the London Stock Exchange, which is Shell's home stock market since it left the Netherlands. At this point, it looks like this is being worked out as transfer agents provide needed information. So you should ultimately get satisfaction, i.e. your SHEL shares. But this is something you should stay on top of until they actually show up in your account. Have you received the cash portion? That's CAD8.20 per share, which at current exchange rates (70 to 71 cents US per CAD) is about $5.78.
Q. Hi Roger,

Thank you so much for your kind reply. Again, thank you so much for checking into this for me. My wife and I are enjoying the fruits of the advisory of yourself and your colleagues in our retirement. We have gotten to a very nice place where our investments continue to grow while we enjoy the dividends.
 
I can report to you that RYDAF shares were added to my account today in the amount equating to 0.4 of my original Arc Resources shares. Reviewing the associated transactions over the last couple of days, it seemed like some fumbling occurred rather than a simple exchange of Arc exchange shares for RYDAF shares - six transactions in all.

Also am wondering why they delivered RYDAF versus SHEL at 1 for 2 RYDAF. Seems to me that a more liquid ADS share would make more sense than an OTC. Maybe the wheels aren’t done turning yet.

Any thoughts on this outcome?—Fred L.
1:47
A. Hi Fred

RYDAF is basically Shell's London-traded share, traded
over-the-counter in the US. It represents the same ownership and pays the same dividend, which will be converted from GBP to USD by your broker before payment--just as AETUF did and as the ADRs do. So your
RYDAF is basically like your AETUF was.

It is possible to convert RYDAF into the NYSE-listed ADRs. But there will be fees to do that. And of course, ADR sponsors collect fees as long as you own SHEL--there is no fee for owning RYDAF. It is possible to sell the RYDAF and put the proceeds into SHEL. That will involve paying a commission. And unless you had ARC (now RYDAF) in a tax deferred account, there will be taxes as well. The procedure for doing so starts with messaging your broker for a "cross border ADR
conversion" or a request to "journal RYDAF over to SHEL." There will
then be a process to follow, which could wind up taking longer than
getting the RYDAF did.
1:48
In my view, you first want to make sure your account wasn't assessed fees for the six transactions you said were needed to get your AETUF into RYDAF. That's on the brokerage, not you. After that, I don't see a lot of utility in swapping RYDAF into SHEL, or selling RYDAF to buy SHEL. The RYDAF shares aren't as liquid as the SHEL. So it's possible the broker will mess up the pricing from time to time, as it no doubt did for your AETUF. But Shell a major company--not a penny stock traded as a five letter OTC symbol. So again, holding RYDAF is just another way to own SHEL--except you have two ordinary shares versus
one ADR.
1:49
Q. In the REIT Sheet Table of all REITs, are the Ratings (Buy < XX) in USD or CDN for entries listed for the TSX?—James R.
A. Hi James
 
All the buy prices, Dream Buy prices and Profit Taking levels are in US dollars. That’s true of REIT Sheet as well as other advisories where we recommend non-US companies (EIA, CUI etc).
1:52
Q. I thought you may have seen this, but……

Hess Midstream Stock Plunges, but the Chevron Deal Has a Silver Lining
Also this: Just got this. One thing after another.—Frank W.
SpaceX Is Crashing the Wireless Party. Telecom Stocks Are Paying the 

Hi Frank

Editor’s note: This is a question we received early in the month. And we’ve since addressed both stocks in Alerts sent to readers of the advisories where they’re recommended.—RC
1:53
I had thought Chevron would buy in the rest of HESM that it didn't already own, as it had done earlier in the decade with the former Noble Midstream (NBLX). Instead, it basically decided to divest those assets--which are primarily in Colorado in the DJ Basin--as well as the HESM assets in the Bakken. As part of that, it gets a more
economic long-term deal on midstream services in both basins, which presumably will enable them to maintain and/or increase production from those regions. The agreement extends their relationship with HESM for 20 years, thereby eliminating the risk they would end them early in the next decade. And they're fee based, so HESM has no exposure to commodity prices. The deal reduces revenue to HESM but it also cuts shares outstanding by 40%--so free cash flow still covers the dividend and allows growth to continue. I also think this deal makes HESM a
legitimate takeover target going forward, as there are no large shareholders that could block a deal.
1:55
Bottom line, I think many of us were expecting a cash takeover. And the drop in the shares reflects that fact that's not happening. Long-term, though, I think this will work out much better. And I would expect a takeover offer ultimately in the 50s--or a share price well north of there if HESM remains independent.
As for the SpaceX vs telecom saga, this is pretty much a repeat of what we saw a few months ago, when Elon Musk made a comment about SpaceX/Starlink becoming a fourth (or really sixth) national wireless competitor in the US. The result then was a one-day panic sell of the Big 3--AT&T, T-Mobile US and Verizon--which they later recovered from over a period of a few weeks, following what were very strong earnings on several fronts. These companies have essentially been taking market share from the rest of the sector since the 1990s, a trend that's accelerated with broadband gains from cable television companies and others.
1:57
Q3 results for AT&T and Verizon have confirmed the same in the past week. Both companies posted much larger than expected customer acquisition in both wireless and fiber broadband. Both were able to cut their acquisition and retention costs in Wireless. And both raised earnings guidance while posting near-record levels of free cash flow.
 
1:58
This announcement from SpaceX that it will acquire spectrum seems to confirm Musk intends to enter the wireless business. As he owns 80% plus of SpaceX, he can pretty much do whatever he wants, whether it makes sense or not. And I'm not inclined to waste time trying to
figure out what's going on inside his head. But I do have a few observations.

First, Starlink/SpaceX is going to have to acquire orders of magnitude more spectrum than was just announced with the Grain Management deal. That purchase reportedly cost $8 bil. It's also noteworthy that this spectrum is what T-Mobile swapped for $2.9 bil in cash plus all of Grain's 600 MHz spectrum licenses earlier this year--so it's not
spectrum T-Mobile thought valuable enough to keep. Becoming a fourth major wireless competitor will also require building or contracting for infrastructure--that's why wireless tower companies rallied on the news, though they dropped on the announcement this summer that SpaceX
would offer wireless service.
1:59
Second, satellite can't compete well with so-called "terrestrial" networks on either cost or capability. The technology is amazing. But it's still a much more expensive way to offer the same service fiber/5G already does to 99% plus of the country--and will offer to 100% as the Big 3 execute their venture to eliminate "dead zones." And that's before Starlink plans to launch 15,000 satellites. Again, SpaceX is a fiefdom of a single individual who answers to no one--least of all minority shareholders.
So it will spend whatever it wants. But the simple economics don't make much sense.
Probably most important, the US wireless business is now basically consolidated to 3 major players--per the Chinese model. And as a result, profit margins have stabilized along with return on investment. But take a look north to Canada where there are four national competitors and no one is making any money. SpaceX may spend the hundreds of billions of dollars needed to build a satellite
wireless network. And it will likely gain revenue and market share. But so doing, it will also undermine its own return on investment--and as the high cost producer it will have a lot less margin for error than AT&T, Verizon or T-Mobile US.
2:00
Elon Musk is by far the world's richest man on paper--but that depends entirely on what people are willing to pay for SPCX. Because the company is literally losing billions of dollars, that means sustaining the wow factor is absolutely critical. Threatening to take down Big Telecom is certainly a wow. But remember SolarCity. The claim was the solar panel company was going to eat electric utilities' lunch. Solar has taken off in this country. But SolarCity wound up being acquired by another Musk company--Tesla--pretty much as a bailout.
2:03
And finally, there's a real question about how much SpaceX will be able to tap capital markets in the future, after recently borrowing another $40 bil. Its would-be rivals AT&T, Verizon and T-Mobile all fund their CAPEX with internally generated cash flow--with enough left over for dividends, debt reduction and share buybacks. SpaceX will only grow as fast as it can find investors to lend it money. In a bull market, this is a distinction without a difference. But in a bear market, it's the difference between success and insolvency--especially if Tesla or SpaceX shares take a real hit.
Bottom line--this looks like another good opportunity to pick up some great telecom stocks at a low price. AT&T is at 7.3X earnings, VZ is at 10.7X and TMUS is 15.6X with parent and majority owner Deutsche Telekom at 13.4X. SPCX does not have positive earnings and sells for 93X sales. I think shorting the stock is easily as problematic as
shorting TSLA has been. But it's trading on hero worship and momentum.

Q. Hope you and Elliott are doing well.
I am doing well thx to you guys

I started with you some decades ago when you were with the previous company.

Over that long time I of course accumulated a large supply of Canadian stocks.  They are way above the purchase prices but lately have fallen off a bit. Is this because of the idiotic nonsense of naming Canada the 51st state or this business of taking some structure that has been in existence for hundreds of years and now trying to rename it America some thing or other.—G.F.
 
2:05
A. I think any weakness in Canada we’ve seen the past months has been more or less due to general selling of energy stocks, which has touched pretty much everything.

We've talked about escalation vs de-escalation as themes for traders in oil. And for one reason or another, it looks like de-escalation themes are ascendant--despite the fact that news flow definitely indicates otherwise. Natural gas, meanwhile, has been negatively affected by what we believe to be overblown worries about the Super El Nino.

Sector companies are already coming out with strong Q3 results and more than a few guidance increases, including midstream companies. Companies are also treating increased cash as a near-term windfall rather than a reason to really ramp up investment. That means cutting debt, making acquisitions, investing in technology that
reduces costs and returning cash to shareholders--though more as buybacks and variable dividends than permanent dividend increases.
2:07
If you believe the reports, oil flows are already more or less at pre-Operation Epic Fury levels in the Middle East. We don't think the world goes back to the way it was, with importers blithely relying on Middle East energy sources.
Prices would come down for oil and we could see more selling pressure for energy stocks. But I would view a further retreat as a good opportunity to pick up high quality energy stocks--including in Canada.
Q. Hi
2:08
Viper Energy (VNOM) has shifted their "return of capital strategy" from variable to a increased fixed base dividend of $2.00/share, secure even at $30 oil. Does this shift in FCF allocation change your dream price or buy up to price, or for that matter, your recommendation?—F.F.
Frank F
A. Hi Frank

I wrote about the Viper change recently in Energy and Income Advisor. Having a base dividend of $2 a share that it can maintain at much lower oil prices should build a floor of sorts under the share price. But the upside is going to come from variable dividends and stock buybacks--in addition to acquisitions of new royalty lands, including
properties operated by companies other than parent Diamondback Energy (NSDQ: FANG).

The change in dividend strategy does not change my opinion or buy up to price for Viper. It's still a royalty company and it will rise and fall with oil prices--as cash flow is determined by how much third parties pump on its Permian Basin properties and realized selling prices for that output.
Well that's it from the e-mailbag. If you sent a question we did not answer, please enter it in the chat. Now let's get to some live ones!
Frank
2:17
I'm not sure I follow your thinking on the HESM deal. Chevron is very good at due diligence and analyzing the value of a deal, and they walked away. They cut their rigs from 4 to 3 and now to 2. That's not comforting. Their bread and butter is in a basin with a high breakeven point. If HESM is ripe for a takeover in 2-3 years in the $50's, why did Chevron not take it out now at a better price? It all feels like a vote of no confidence
AvatarRoger Conrad
2:17
Hi Frank. I don't agree that Chevron is walking away from Hess. Yes, they've cut the number of rigs. But they've actually extended a relationship for 20 years that they could have sought to exit entirely with a buyout or just let run out in the next 3-5 years. And they now just Hess Midstream not just in the Bakken but in the DJ Basin as well.

As for why they didn't just buy out HESM as they did NBLX earlier in the decade, I don't claim any particular inside knowledge. But I can think of several reasons. One, they didn't want to be further into the midstream business. Two, they're following a plan to sell assets that they laid out when they announced the Hess Corp acquisition. Three, they still need midstream services in this region. And this deal improves their economics greatly. I will also note the company has ramped up its DJ Basin output 3X since buying Noble and changing the economics of the midstream contracts.
Frank
2:22
I might have asked this before but I forget. Companies that appear in both the High Yield portfolio and the Managed Portfolio I often see different "Buy Up To" prices.Is there a reason the managed portfolio recommendations are more conservative?
AvatarRoger Conrad
2:22
The High Yield Energy List isn't really a portfolio. It's a buy list of very high yielding energy stocks we started in 2019--and after a rough first year, it's been generating solid returns. Some of the HYEL names are in the Actively Managed Model Portfolio. But the Portfolio is not intended to be just a list of stocks. Rather, it's our recommended way to invest in the energy sector--with recommended weightings and even a cash component. And the advice given is not just buy/sell/hold--it's where to buy, how much to buy and when to take a profit. And sometimes the advice is different than it is for just the straight list of stocks, which is HYEL. Hope this answers your question.
Jack A.
2:29
Hi Elliott:

While Venture Global has done well recently, and its future seemingly bright with natural gas in the United States selling at a fraction of its cost in Europe, the stock is still selling at approximately half its IPO price. Are there still overhangs from its legal difficulties? Have all those lawsuits been settled? What do you see going forward?
Thanks
AvatarElliott Gue
2:29
Thanks for the question. Yes, VG has three remaining issues out there. The biggest is the BP damages hearing set for May 2027 with the final damages award expected to be announced late next year or early 2028. They also have an outstanding arbitration with Orlen with that ruling expected before the end of 2026. They have one additional arbitration loss (Galp Energia), but that's capped at $170 million maximum so markets aren't too concerned about that. All other cases have either been decided in VG's favor or settled for inconsequential amounts. Over the past year, the degree of uncertainty over potential future damages VG might owe have been substantially reduced, so we don't see the remaining arbitration and the two damages awards as major headwinds for VG.
JT
2:39
Hi Elliott, may I get your thoughts on SLB's earnings and the stock from here into next year?  

Any thoughts on FLEX and its pullback? Any thoughts of adding back some of the partial sales we made previously? Thanks!
AvatarElliott Gue
2:39
SLB remains a top pick for us right now. SLB beat consensus coming into the call and the stock responded positively +7% on the day after its release, which is a good signal that it was a true upside surprise. Generally, our view is that you'll see some rotation within energy over the next 3 to 6 months. We did a detailed free breakdown on Valero (VLO) as part of this month's issue and our view is that VLO, like all the refiners, is pricing in a ton of positive news you needs years of near-record margins to see any meaningful upside in the stock. And I think we both were a little surprised at how many pundits at the Orlando Money Show were pushing the group -- sentiment like that is generally a sign that you're closer to a top than the middle of the cycle. At the same time, pretty much every E&P I've done a deep dive on -- PR, OVV, etc -- is factoring in long-term oil prices closer to the mid $60s/bbl, so we see way more upside in that group. Services are, arguably, even cheaper on my models even as we see
AvatarElliott Gue
2:39
clear signals of an upturn in the international (ex-N. America) spending cycle in particular.
Jeffrey H.
2:39
I would appreciate your thoughts about two REITS that seem to dwell at opposite ends of the retail spectrum -- NNN (convenience stores) and FRT (high end grocery anchored retail with mixed use developments). FRT appeared to post good numbers that showed it has pricing power -- is it too pricey? As for NNN, I know it is below your by-under price but how do you evaluate its prospects? Thank you
AvatarRoger Conrad
2:39
Hi Jeffrey. NNN reports Q3 results on November 4. And I'm expecting a third quarter of raised 2026 guidance--with improved portfolio occupancy, rent growth and expansion with acquisitions--funded partly with sales of non-core properties with good cap rates. As the CEO has pointed out, there's less construction of high quality retail spaces than there is office. The prices of these retail REITs seem to me to be anticipating a recession. But we're still getting FFO and dividend growth.

The grocery-anchored REITs are probably the most expensive--because of their well deserved reputation for thriving during recessions, as well as takeover potential after the private capital buyout of Slate. FRT's purchase of The Summit in Alabama is kind of a step outside the box. But it's a quality stock And depending on what they report later this month, I may upgrade to buy.
Frank
2:43
As Permian wells age they get more gassy, also more Permian pipelines are coming online to take away the associated gas, which is now almost given away, so wouldn't this additional supply mute the demand from LNG and data centers?
AvatarElliott Gue
2:43
Thanks for the question. Yes, there's more associated supply coming out of the Permian, but everyone knows that already and it's already factored into the supply/demand models. What's important isn't the level of supply growth but how that compares to what's expected; in our view, the outlook for demand growth over the short-to-intermediate term remains robust underpinned by the ~4 bcf/day of new LNG export capacity coming on by early 2028. Beyond that, the outlook for demand growth is arguably even brighter than it was a few quarters ago as we have LNG buyers scrambling for US supply late in the decade and further push-backs of planned Qatari LNG expansions. Growth in demand will require Permian + Marcellus volumes plus, importantly, incremental volume out of the key US swing basin, which is the Haynesville.
Al C.
2:47
Please address the T, VZ and TMUS current status re safety and growth of dividends going forward since Elon has entered the game.
AvatarRoger Conrad
2:47
Hi Al. I answered a pre-chat question on this issue pretty extensively. But to sum up my view, I don't think SpaceX/Starlink is going to have a lot of impact on these companies' earnings in the next 3 to 5 years at least--and I see the reaction to Musk' statements as well as the much publicized spectrum purchase as hugely overdone.

SpaceX may spend the hundreds of billions of dollars to build a network to eventually compete. But in a best case, that would take 3-5 years. It would depend on investment markets being willing to provide a bottomless source of funds--the company just borrowed another $40 bil this week. And at the end of the day, Starlink would be a sixth competitor--against companies self-financing $20 bil plus in annual CAPEX to take their networks to 6G and beyond.

It's also telling I think that AWS and other Big Tech companies--that arguably have better tech than SpaceX--are partnering ever more closely with Verizon, AT&T and T-Mobile in the US--rather than enter new deals with Musk.
AvatarRoger Conrad
2:48
Musk may also be damaged goods politically after next week's election--and SpaceX is hugely dependent on federal government largesse.
Tom L.
2:48
We have seen significant increases in the price of equities of refiners, such as VLO, MPC. In the last couple of weeks, the prices dropped. Is there a reason for this, other than the purchase of Russian oil?
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