Energy Long, Celsius Stock Short

YTD Index Review & Energy

Dan Bustamante
September 16, 2023
5:51 pm
DeltaOne, Short Selling, The LongVol Report

YTD Index Review

Let’s take a look at Index & Energy Markets Review with some data points for this year starting with the indices as a review to begin. Much of this is led by 7 stocks and NVidia being one of them became a special situation trade that was discussed last week in The LongVol Report.

Energy Markets Running

Depressed commodity prices in the first half of the year had an effect on most names in the space but now with energy prices higher that should shift sentiment and earnings. You can see that shift in projections in FCF in many of the majors going forward. In addition, this space should continue to see share buy backs which is a benefit to long-term shareholders and puts buy side pressure on some of the names listed.

I am bullish on oil prices and the sector at large. We have record low inventories, recession or not, nominal demand crude oil demand goes up. Supplies are very tight and the SPR is at record lows and without investment for infrastructure for production that causes an issue.

Dividend Yield in Energy

Last year, the 50 top oil and gas producers spent $59 billion on dividends and buybacks, up from $19 billion in 2021.

US oil and gas producers more than tripled earnings on a per-barrel-of-oil basis in 2022 from 2014, the height of the shale revolution.
Higher commodity prices led the studied companies to reach record revenues ($332.9 billion) and pretax profits ($187.5 billion) in 2022.
US oil and gas independents more than tripled shareholder returns, from $19.0 billion in 2021 to $58.8 billion in 2022

Final Word

FOMC is on deck this week along with housing data and some other key points that are important for the markets.

Energy is leading right now and that likely continues to be a theme for me into Q12024.

Housing data this week will be key for the short positions there.

As a reminder, the October Mastermind deadline is approaching, be sure to register in time.

Next Lesson

Final Quarter of 2024 Stock Market

October 3, 2024

Stock Market Stimulus

September 19, 2024

The Main Event is Here

September 12, 2024

About the Author

Daniel Bustamante is the founder, managing partner, and CIO of Bustamante Capital L.L.C., a multi-strategy hedge fund management firm based in San Juan, Puerto Rico. He has over 10 years of experience in the financial industry, specializing in equities, futures, and event-driven trading strategies.

He is also the founder of TheLongVol.com, a blog and newsletter that shares his insights on his investing process, travel, and other private investments. He has been featured in Bloomberg, Arizona Business Journal, Business Insider, Yahoo! Finance, Forbes, Seeking Alpha, and other publications over his career on Wall Street.