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Investing Idea - Bringing back another Energy Play

Capital Efficiency & Productivity may drive 6% yield to shareholders

We’ve been going heavy on the energy sector because it’s been one of our highest conviction calls. We continue to remain bullish on Energy on a long-term secular basis because of the inherent undersupply.

But, even in the intermediate term, oil prices continue to signal bullish for us because of:

  • A higher demand is being brought back by global manufacturing picking up.

  • An undersupply due to reduced OPEC+ quotas remaining in place (to a certain extent until the end of the year)

  • Geopolitical tensions weighing on Middle Eastern and Russian oil supplies

Our next pick is a company that I really liked in 2022 and rode it all the way to its peak. The stock saw a +49% return in 2022.

Unfortunately, 2023 wasn’t a stellar year for this company and we saw the price pull back -26%. Year-to-date, however, we’ve seen some recovery and we expect this to continue, not only because of higher oil prices but, because of fundamental aspects within the company.

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