SCHACHTER ENERGY REPORT: August 29, 2019 - Index

In This Issue

  • SER ‘Catch The Energy’ Conference EARLY BIRD Pricing ends September 19th – Please get your tickets ASAP to avoid disappointment.

  • Trade War ‘Tit For Tat’ Pummels Stock Markets.

  • Energy In The Crosshairs Of Trade Battle – Lows Not In Yet.

  • Review of Q2/19 results for 10 of our Coverage List companies.

  • Coverage List & Valuation List.

  • Action Alert BUY & SELL Lists, and SER Ownership Disclosure.

More internal deterioration in the US stock market has occurred since our last SER Monthly issue due to the deepening trade war with China, and US President Trump’s “The Chosen One” tweets exacerbating the issue.

We’re grateful that we have our new Manager, Subscriptions & Marketing, Cera Dixon, handling all our SER tweets, providing a rational filter!

With China’s move last Friday to add 5-10% tariffs on US goods, impacting more industries (semi-conductors, grains, auto’s and energy) in retaliation for the pending September 1st US tariff increases, the stock market dropped by 623 points for the Dow Industrials. Since the beginning of August we have now had four nasty down days for the markets. We expect many more painful days as we head into October. The Dow has 5,000 more points of downside in our opinion. From the high of 27,400 to the potential low around 20,000 implies a correction of 27%.

Last Wednesday, WTI rose to US$57.13 as the initial report from the EIA was positively received. But as the details were released, the price fell because the inventory decline was caused by net imports declining. By day’s end the price has gone negative and with China’s trade ‘tit for tat’, the price fell by US$1.46/b to US$53.89 with a low on Friday of US$53.33/b. Energy stocks, having already been hit hard, are likely to get shafted some more as the general stock market decline unfolds and inter-market margin call pressure hurts the sector. Over the last month the S&P/TSX Energy Index dropped 12% from 137 to 120. We expect the final bottom for this Index to be below 110. For some time we have been saying that Crude Oil should plunge to the US$44-48/b level for WTI, which is now unfolding. Stocks are cheap and we are nibbling on high dividend yield securities for our personal holdings.

We added to our position in Vermilion Energy last week at $19.20 per share which, at that price, provides a 14.3% yield on the 23 cents per month payment. We are not in the camp that expects the dividend to be cut. In February 2016 when WTI fell sharply to US$26/b, VET continued to pay their monthly dividend regularly despite some calls to gut it. Management likes the dividend model which they see as sustainable and they could cut some of their capex if things get more dire.

The S&P Energy Bullish Percent Index has fallen from nearly 45% at the beginning of the month to 29% on Friday but still is a long way away from signalling a low risk buying window.

We expect to see this Index do so in October as:

  • the market melts down to near 20,000 on the Dow Industrials,
  • we get the crack of US$50/b for crude oil towards the target of US$44-48/b,
  • we see the VIX rise over 40 (closed at 20 up 3 points on Friday alone) and
  • the Energy Bullish Percent Index is below 5%.

We will issue an Action Alert to Black Gold subscribers when the signals are all in sync for adding to your energy holdings. If you are an SER subscriber, you will need to switch to a Black Gold subscription when your current subscription expires as the SER monthly-only product has been discontinued.

Webinar Highlights

We held our quarterly SER webinar on Thursday August 15th and from the survey results it was the most well received to date. We encourage subscribers to check the archives and listen to the webinar at their leisure, though attending live is the only way to interact as it happens.

The topics covered were:

  1. SER ‘Catch The Energy’ conference schedule now available for review. Please sign up to get best access to VIP luncheon.
  2. The Trump Trade War, weakening world economies and why we can expect a severe general stock market correction into late October. The next low risk S&P Energy Bullish Percent Index should flash ‘Buy!’ at that time.
  3. The negative view on the Canadian energy industry is just wrong – there is growth ahead even if the Liberals win the October federal election.
  4. Why we like Vermilion Energy (VET-T) and why we see the dividend as sustainable. We are buyers!
  5. Subscriber question: compare Arc Resources (ARX-T), with Peyto Exploration (PEY-T) and Tourmaline Oil (TOU-T). Which one is our favourite?
  6. Bonavista Energy – a survivor in our book with a new interesting significant investor.
  7. Lengthy Q&A.

2nd Annual Schachter Energy Conference

Catch the Energy Saturday, October 19th in Calgary
Mount Royal University

Early Bird Ticket Sales End September 19, 2019!

Public Marketing Begins September 1st!

General AdmissionVIP Tickets
2019 Early Bird$99$149
2019 Regular$129$179

All Prices Plus GST.

This conference is a rare opportunity for Active Investors interested in the Energy Sector to interact with Energy and Energy Service Company CEOs and Executives.

Each company is also hosting a table at lunch for 8 or 9 attendees offering more in-depth discussions about the companies or the energy sector. Don’t miss out!

2019 Highlights

  • More convenient venue
  • More Access: VIP Lunch with CEO at Table for 10
  • 26 Companies Presenting
  • Larger Breakout Rooms
  • Indigenous Leader Panel Session
  • 33 Exhibitor Booths
  • More Food and Beverage Stations

Each company will have 30 minutes to present their stories followed by 15 minutes of moderated Q&A. If you have any concerns or issues with any of the companies attending, why not come out to meet the people running the company and ask them directly?
SCHACHTER ENERGY REPORT: August 29, 2019 - Index

SPONSORS & PARTNERS

PRESENTERS

JOSEF TWEETS

If you want to see Josef’s tweets and don’t have a twitter account, you can view and bookmark his twitter page here.

TO BUY OR NOT TO BUY

VALUESCHACHTER ENERGY REPORT: August 29, 2019 - IndexSENTIMENTSCHACHTER ENERGY REPORT: August 29, 2019 - IndexTECHNICALSSCHACHTER ENERGY REPORT: August 29, 2019 - IndexOVERALL
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SCHACHTER ENERGY REPORT: August 29, 2019 - Index Green Light to Buy
Cheap Valuations, Sentiment not bullish, Technicals very attractive

SCHACHTER ENERGY REPORT: August 29, 2019 - Index Yellow Light for Caution
Some wavering on parameters, or parameters not clear. Some stocks may be attractive, others not so

SCHACHTER ENERGY REPORT: August 29, 2019 - Index Red Light to Stop or Sell
Parameters bearish, stay away, sell down, warning to wait for the next buy signal

INDEX • IN THIS ISSUE

Clicking Each Section Will Load It In a New Tab.

1. STOCK MARKET

Trade War ‘Tit For Tat’ Pummels Stock Markets.

2. ENERGY OVERVIEW

Energy In The Crosshairs Of Trade Battle – Lows Not In Yet.

3. QUARTERLY REPORTS

Review of Q2/19 results for 10 of our Coverage List companies.

4. LISTS

Covered Companies & Valuation Analysis. Company Links.

5. LISTS

Action Alert Buy & Sell, & Ownership Disclosure.