Sí, puedo. All my South American friends have heard me butcher Español, except for my Brazilian colleagues, who have heard me do even worse things to Português.
But, seriously, "yes, I can" is the proper attitude for these markets. As followers of my HOAX portfolio and all its successors have seen, I don't like to follow the herd.
I have begun to put the newer versions of these portfolios, as well as the updated versions of the original HOAX family -remember that opportunistic reinvestment is the key to income investing - behind the paywall at my site www.excelsiorcapitalpartners.com Hey, I gotta make a living. Sí, puedo.
But my first, last and always job is equity research. So, I like to follow my investments as if they were my children, and this morning I listened to a conference call from one of them, CorEnergy Infrastructure Trust (CORR) , an issuer of the preferred (CORR-A) that is included in my paywalled HOAX 3.0 portfolio.
I am not some con artist or financial media grifter. I hope you know that by now. I don't say "the call was great," if I haven't listened to it in full, or spout nonsense like this company "crushed the quarter" or "Netflix! BUY!" (NFLX) . We don't make those mistakes at my firm, Excelsior Capital Partners, because we do our homework.
That's how I found a company that is in REIT form, yet owns oil pipelines in California and natural gas pipelines in Missouri. CorEnergy is not exactly Apple (AAPL) in terms of name recognition, but AAPL is not exactly yielding 9.7%, as CORR-A is.
Is that yield sustainable? Well, yes, and sustainable may actually be the key term there. CorEnergy, through its ownership of Crimson Midstream, operates regulated oil pipelines in California. That is an incredibly advantageous position as California and the Newsom Administration are not exactly rushing to build new hydrocarbon infrastructure. The existing infrastructure has pricing power and CorEnergy management noted on the call this morning that they have submitted a 10% tariff increase to the California PUC.
But sustainability comes in the potential for carbon capture and sequestration (CCS) which is an incredibly hot topic, especially in California. CorEnergy management noted on the call that they are working on initiatives with several potential partners for CCS opportunities, and again, CorEnergy already has the infrastructure, while NIMBY and BANANA concerns make building anything anywhere in California a regulatory nightmare.
If you like yield from hydrocarbon companies as I do, CORR management reiterated guidance for Adjusted EBITDA of $40-$42 million this year, which safely covers preferred dividend payments and leaves some left over for common payments. Remember that preferred holders have a higher call on cash - we are senior in the company's capital structure - and that is key to the ExCap investing philosophy. If you want a green angle, on the other hand, CorEnergy also has it via the opportunity to participate in large-scale CCS projects.
It's the best of both worlds and it is a large holding for me, for my asset management clients and in HOAX 3.0.
If you want to learn more about a company, listen to management's quarterly conference call , and you will find out that yes, you can. But if you want to avoid the "Netflix BUY!" calls of the investing world, you have to also run the numbers. I am nerdy enough to do both. It's not glamorous, but it works. Sí, puedo.
(Please note that due to factors including low market capitalization and/or insufficient public float, we consider CORR to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.)