Dealmaker’s Diary: Timing Matters for This Unusual Energy Play

Alpesh Patel|March 6, 2025

Let’s address the elephant in the room: this market has everyone on edge.

But we’ve all seen this before.

Let me reassure you that my battle-tested methods can help you protect capital while exploiting any market condition.

In fact, today’s video illustrates a simple strategy that would have completely sidestepped ALL the volatility in 2020…

While positioning you perfectly to capture substantial profits during the recovery.

And this strategy is ready to do it again… on an unusual energy play.

Click on the image below to dive in..

Note: Take the emotion out of your investment decisions. My GVI system pinpoints the stocks to ride and the ones to kick to the curb. Yesterday’s webinar revealed three AI stocks with exceptional potential amidst this volatility. Catch a replay of this exclusive presentation for a limited time.

Transcript

Hi, friends.

Dealmaker Diary stock of the week.

It’s been a turbulent week.

Look… they come and go.

We don’t get blown off course from our processes.

I’ve got a slightly unusual one for you (I always say that, don’t I?)

But I like to give different perspectives based on the core fundamentals.

USA Compression (USAC).

It is not U.S. foreign policy, certainly not the policy toward Europe and the rest of the world (just joking).

It’s a provider of natural gas compression services. It also plays a crucial role in producing, processing, and transporting natural gas across the United States.

Drill, baby, drill…

We’re not playing on that narrative. That’s not why I’ve picked it here.

I’m gonna show you in a second why I’ve selected it.

I’m gonna give you a very simple strategy for it.

It has a market cap of $3 billion. So, we’re not talking about a small player by any means.

Some of the fundamentals are okay.

The forecasted price-to-earnings ratio (P/E) is 25.2x, which seems well-priced.

My proprietary Growth-Value-Income rating, which measures valuation, growth, and dividend yields, has the stock at a 9.

And you might think, well, with a forecasted P/E of 25.2x, why is it a 9?

It doesn’t just weigh valuation, dividend growth, and so on.

So, you’re paying $25 for every future $1 of profits.

The CROCI ratio is 3.

(Goldman Sachs uses cash return capital invested to select stocks for their wealthiest clients.)

That’s a little bit below what I’d ideally like to see.

The Sortino ratio is not bad. That’s the average return versus downside risk.

Vlatility is 8.6%, which is very low.

That’s good.

Now, it’s been lagging the S&P 500 for a long time.

So, what’s my thinking here?

I’m gonna give you a very simple thought process here.

Given market volatility and all of those things, it is not simply that since 2021, you’ve just had a straightforward, angle. It is not that.

The reason is, if you do look at this, the stock price does indeed tend to move around that long-term average.

Essentially, you could translate that into a very simple rule.

Look for the stock price and average price to move slightly above the long-term average.

The green (MACD) is above the blue (MACD moving average), you stay in. If it’s below, you stay out.

You might be thinking, “Hang on, Alpesh. The green isn’t above. It hasn’t started moving up.”

Keep an eye on it.

It’s about to. Don’t get in prematurely. Wait for it to happen.

I mean, you could get in prematurely. You just might have to wait a bit longer if it takes longer to get up.

But I say wait. That’s the rule with it.

Now, if you look back, what would have happened is you got in here (end of 2020) out there (mid 2024).

Okay. So it’s not bad.

Now, there might be periods where you just missed volatility. That’s all.

In 2020, you exited (around $12.50 in early 2020) at the same point you re-entered (same price in late 2020), but you just missed the volatility.

There’ll be other points where it just simply doesn’t work as a rule. Right?

You might end up, I don’t know, getting in there and out there, and you have a small loss.

The losses should be small with companies like this.

Now, don’t go around applying that willy-nilly to other companies.

I’m just giving a simple example here. And the fundamentals still look fairly sound.

It’s not a knock-the-light-bulbs-out kind of company.

But when we find ones like this, a different perspective to the norm, it still ticks many of our boxes.

It drew my attention because of that and because, of course, America First, oil and gas. So, there’s some narrative there as well.

And like I said, it’s a well-valued company on a P/E basis and a discounted cash flow basis.

You’re not buying this because it’s undervalued.

Right?

You’re buying it on a simple momentum rule backed by the fact that it’s not ridiculously overvalued.

It is not growing poorly. You know, it’s not got low growth. It’s not got negative growth.

So, you’re mixing those factors in and saying, under this benign background, can you get a simple momentum strategy?

Hope you found that interesting.

Always looking to teach new things to you all.

Thank you very much.