The Fund invests primarily in equity and equity-related securities of companies that are involved directly or indirectly in the exploration, development, production and distribution of oil, gas, coal, or uranium and other related activities in the energy … The fund will be subadvised by Montreal-based Global Alpha Capital Management, an affiliate of Connor, Clark and Lunn Financial Group (CC&L). We have been purposefully conservative in our estimates assuming that demand growth rates will fall even though there is no evidence of this occurring. What does Saturday's attack mean for energy stocks? Royal Bank Plaza, South Tower, 200 Bay Street Suite 2700, PO Box 27You are now leaving Sprott.com and entering a linked website. The Fund is generally exposed to the following risks. We would encourage our Fund holdings that are in the position to do so to immediately enact a minimum 5% NCIB (if they haven’t done so already). at 3.6x its enterprise value to cash flow when it has 5.7 years of an existing cash flow stream with 56% operating margins that requires minimal capital spending to maintain (total reserve life of 13 years) and whose balance sheet is strong (debt to cash flow of 1 year). Recent data points suggest that European and Chinese demand have rebounded and that Indian demand remains strong. When a company is trading at a discount to their proved developed producing reserve life index and at free cash flow yields in excess of 15% with balance sheets that are rock solid a buyback would:1) demonstrate the improper valuation between the value of the company and the value of the stockInvestors need to see, through the action of executives and Boards, that there is a reason to be invested in energy stocks when every other sector on the planet feels like they are making new highs and making people rich overnight (ie. After going through the 272 page decision it became obvious that the Court’s decision was not as damning as initially perceived. $70+/bbl versus retracing back to $50/bbl). Sprott has partnered with ALPS in offering the Sprott Gold Miners ETF.
In the coming months we will see the confluence of Permian Basin pipelines reaching full capacity, Iranian exports continuing to fall by a highly meaningful amount (1MM+ Bbl/d), Venezuelan production likely to continue its collapse, and hopefully some positive developments with NAFTA/Europe/China tariff discussions.Valuations within the energy sector have simply become too insanely cheap to ignore for much longer.
due to trade disputes/wars/tweets, our opening title is the question that energy investors around the world find themselves asking. For fact sheets, marketing materials, prospectuses, performance, expense information and other details about the ETF, you will be directed to the ALPS/Sprott website at www.SprottETFs.com The Ninepoint Energy Fund seeks to achieve long-term capital growth. An imminent pickup in oil exports (this past week was up 0.6MM Bbl/d week over week) combined with a plateauing of US production should see better relative draws in the US for the remainder of 2018.More holistically, the pace of OECD inventory drawdowns has been lessened somewhat by the factors mentioned above as well as the short-term impact of OPEC production growth (Venezuela and Iran being outweighed by Saudi, UAE, Iraq, and Russian growth) and weak Q2 European refining demand due to warm weather preventing refineries from running at full utilization. The Continuing Fund is an open-end mutual fund also managed by Ninepoint.
The average US company increased their 2018 capex budget by 6.2% while at the same time only increasing their production guidance by 1%. The time to buy is when sentiment is at its worst (and when stocks are discounting $25+/bbl long term differentials which is 50% above rail economics) and we see several potential catalysts which should narrow the WCS differential in the next year:1) Rail capacity potentially expanding to 500k bbl/d by Q3/2019 – GE on September 5th announced an order from CN for an additional 60 more locomotives (260 locomotive backlog) which to us suggests incremental capacity adds of 90,000Bbl/d (a 60,000Bbl/d unit train requires a total of 40 locomotives) if all 60 are dedicated to their oil divisionGiven the 2019 strip for WCS differentials of $23.45/bbl is well above rail economics ($17-$18/bbl) consensus is essentially saying that there is a zero possibility of either rail or pipelines aiding in clearing the congestion and as a result we are getting a free option on any positive development as stocks are discounting the worst possible case for WCS differentials.Specifically on the Federal Court of Appeals invalidation of Transmountain’s approval, we believe the level of pessimism (which we may have contributed to) is somewhat unfounded. To have oil rally by nearly 150% from the lows and make a near 4-year high and yet watch the stocks basically do nothing defies logic. Note that even at CURRENT oil prices there are many stocks that offer highly meaningful upside. Print. Given prior forecasts from the IEA that OPEC can only grow by 100,000Bbl/d a year to 2023 and non-OPEC/US production is about to flat line/decline we continue to believe that inventories will head meaningfully lower (ie. Both funds have similar investment objectives and strategies. The Fund invests primarily in equity and equity-related securities of companies that are involved directly or indirectly in the exploration, development, production and distribution of oil, gas, coal, or uranium and other related activities in the energy and resource sector.
Demand continues to grow while supply is curtailed by the US running out of near-term pipeline takeaway capacity in its dominant growth engine, OPEC has exhausted most of its spare capacity, and Iranian export reductions are finally occurring (September exports down by 800k bbl/d in 3 months…) and could easily dwarf remaining OPEC spare capacity (don’t forget about Venezuela).
The reason for this has been reduced Chinese buying (thank Trump for that one as well as Chinese inventory destocking in hopes of replenishing them at lower levels). Committed to helping investors explore innovative investment solutions that have the potential to enhance returns and manage portfolio risk, Ninepoint offers a diverse set of alternative strategies including North American Equity, Global Equity, Real Assets & Alternative Income.Ninepoint is an operating company that has been created to assume portfolio management of the Canadian diversified assets of Sprott Asset Management LP, including actively managed hedge and mutual funds.For more information on Ninepoint Partners LP, please visit
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