For those of you who have followed our investment process closely over the past few years, you will have noticed that we don’t add stock ideas very often to the HFI Portfolio. Most energy names don’t pass the test, and whether it’s valuation or execution issues, we are very picky.
Since the start of the year, we have been very selective. First, I wrote at the start of the year that crude oil would outperform energy stocks, so we took exposure in USO. After the Iran War began, we used several pullback opportunities to add to our long oil ETF exposure.
We remain long the hefty exposure we have in UCO, USO, and BNO. In addition, we remain long a sizable position in BNO call options, which I have detailed in my oil trade game plan articles.
On the stock idea front:
We bought PXT.TO and GPRK during the July oil selloff. This was part of a broader basket trade in Colombian oil producers.