Kontrarian Korner #56 - Jon Costello (HFIR Ideas)

On Friday I had Jon Costello on the podcast to focus on the energy sector, and some of the individual ideas he likes in different subsectors and geographies. He writes on the HFIR Ideas side for HFI Research. It was the perfect follow up conversation after I had Wilson on the podcast last Wednesday. If you’re looking for a starting point for your research on some single stock ideas in the energy space, you will enjoy this podcast.

Podcast Summary

* Jon’s big picture view on energy over the next 6-18 months, and his approach to investing in the sector.

* Why he favors the Canadian energy names and offshore oil services.

* What happens to North American energy companies with oil below $70 a barrel as far as Capex cuts and production growth.

* The impact of the Canadian election on the Canadian companies and the macro picture for oil.

* Which Canadian names he likes and why, from the large companies to smaller names that aren’t as widely followed.

* British Petroleum $BP and Elliott Management’s activist push to get them to focus on their traditional oil and gas assets.

* Offshore oil services, the embedded call option in the stacked capacity of some of these companies, why he prefers the deepwater companies, and which companies he favors in the sector.

* He lays out the nuance he sees on natural gas vs. oil, and his thoughts on being bullish on gas being a more consensus view today.

* Midstream ideas, MLPs, and which stocks he favors in sector.

* Book Recommendation: Descartes’ Error by Antonio Damasio.

Kontrarian Korner is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.kontrariankorner.com/subscribe