RT Bloomberg Live (@BloombergLive)How are today's leaders investing in the next generation of transport and storage solutions? At #BBGCanadianFinance we speak with:◼️ @Pembina's Scott Burrows◼️ @KeyeraCorp Eileen Marikar◼️ AltaGas Ltd's Vern YuFind out more ⬇️ ...

Market Overview - The current market is characterized by uncertainty, with tech stocks facing pressure due to concerns about an artificial intelligence bubble, alongside global tensions, trade disputes, and rising inflation expectations [1][10] - In this environment, value investing is recommended, focusing on purchasing solid companies at reasonable prices [1][10] Earnings Yield - Earnings yield is a key metric that indicates how much a company earns for every dollar invested in its stock, calculated by dividing annual earnings per share (EPS) by market price [3] - A higher earnings yield typically suggests a stock may be undervalued, while a lower yield could indicate overvaluation, assuming other fundamentals are equal [4] - Investors often compare earnings yield with bond yields, particularly the 10-year U.S. Treasury yield, to assess stock attractiveness [5] Screening Criteria for Value Stocks - A primary screening criterion is an earnings yield greater than 10%, supplemented by additional parameters such as estimated EPS growth, average daily volume, and current price [6][7][8] - The estimated EPS growth for the next 12 months should be greater than or equal to the S&P 500, indicating potential for solid returns [6] Selected Stocks - **Plains GP Holdings (PAGP)**: Involved in crude oil and refined products transportation, with a projected earnings growth of 215.4% and 27% for 2025 and 2026, respectively [9] - **Heritage Insurance (HRTG)**: Provides insurance products, with expected earnings growth of 104% and 1.2% for 2025 and 2026, respectively [11] - **The Mosaic Company (MOS)**: A leading producer in agriculture, with projected earnings growth of 60% for 2025 [12] - **LATAM Airlines Group (LTM)**: Latin America's leading airline, with expected earnings growth of 45% and 19% for 2025 and 2026, respectively [13] - **PHINIA Inc. (PHIN)**: Designs fuel systems, with projected earnings growth of 18% for both 2025 and 2026 [14]

Core Insights - Value investing focuses on identifying stocks trading below their intrinsic value, allowing investors to benefit as market prices align with true company value over time [1] - Earnings yield, calculated as earnings per share divided by stock price, is a useful metric for identifying undervalued stocks, with a higher yield indicating potential undervaluation [2][4] - A screening criterion of an earnings yield greater than 10% is established, alongside other parameters like estimated EPS growth and average daily volume [6][7] Company Highlights - IAMGOLD Corporation (IAG) is a gold exploration and mining company with projected earnings growth of 44% and 40% for 2025 and 2026, respectively, and currently holds a Zacks Rank 1 [9] - Plains GP Holdings (PAGP) is involved in crude oil and refined products transportation, with earnings growth estimates of 206% and 24% for 2025 and 2026, respectively, also holding a Zacks Rank 1 [10][11] - Hope Bancorp (HOPE) provides commercial banking services, with earnings growth estimates of 12% and 40% for 2025 and 2026, and holds a Zacks Rank 1 [12] - CommScope Holding Company, Inc. (COMM) offers communication network infrastructure solutions, with an extraordinary earnings growth estimate of 3,167% for 2025 and 28% for 2026, holding a Zacks Rank 2 [13] - Harmony Biosciences Holdings Inc. (HRMY) focuses on therapies for rare neurological disorders, with earnings growth estimates of 22% and 32% for 2025 and 2026, and holds a Zacks Rank 2 [14]

Strategic Decisions & Financial Performance - Genesis Energy successfully exited its soda ash business for $1425 billion, receiving ~$1 billion in net proceeds[6, 9] - The transaction significantly reduced annual cash costs by >$120 million[9] - Reported Adjusted EBITDA of $1317 million in the first quarter[9] - The company maintains a clear path to Adjusted EBITDA growth in 2025 and increasing cash flow[9] Offshore Pipeline Transportation - Shenandoah and Salamanca developments remain on schedule for first oil in mid-2025, with a combined capacity of ~200k/d[9] - A new 105-mile SYNC pipeline connecting to Shenandoah FPS is in progress, with commissioning scheduled for late-May 2025[9] - Offshore Pipeline Transportation segment margin was $76548 thousand in 1Q 2025[14] Capital Allocation & Credit Profile - Annual cash costs to run the business are ~$425 - $450 million per year[9] - The company has a credit facility with $800 million in commitments[9] - The leverage ratio was 549x at the end of the first quarter, with a target of maintaining it at or near 40x[9, 14]

Core Viewpoint - OPEC+ plans to increase oil production, negatively impacting oil producers like ExxonMobil and ConocoPhillips, while benefiting oil transport companies like Frontline due to increased demand for shipping services as oil prices fall [1][3][6]. Group 1: Impact on Oil Producers - ExxonMobil and ConocoPhillips stocks are down 2.5% and 3.6% respectively following OPEC+'s announcement [2]. - Brent crude prices have decreased by 28% over the past year, contributing to the negative sentiment around oil producers [2]. - The increase in oil supply by OPEC+ is expected to lead to further price declines, which will negatively affect profits for ExxonMobil and ConocoPhillips [4][3]. Group 2: Impact on Oil Transport Companies - Frontline's stock is up 3.9% as the demand for oil transport services is expected to rise due to falling oil prices [2][6]. - The company benefits from increased shipping needs as consumers seek to purchase cheaper oil, leading to higher demand for Frontline's services [7]. - Frontline is considered a cheaper investment option with a trailing earnings ratio of 7.7 and a generous dividend yield of 4.7% [8]. Group 3: Long-term Considerations - Despite the current sell-off, long-term investors may consider buying Exxon and ConocoPhillips stocks due to their respectable dividend yields of 3.7% and 3.4% respectively [9]. - Both companies are reasonably priced with trailing profit ratios of 14.1 for Exxon and 11.7 for Conoco, suggesting potential for future growth as demand rebounds [10].