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I am no expert, but I do own some stock in Chesapeake (CHK).
America has vast untapped potential in natural gas and so does her allies like Canada and Britain. Natural Gas can heat homes, be used to generate electricity, run cars, and even be reproduced from landfills and swamps. I really think this energy source will grow a lot in my lifetime. Furthermore, a natural gas combustion engine is vastly cleaner than standard gas combustion engines...which may be huge with the Green Movement.
Chesapeake is a decent company. I originally picked them, because they are (not sure if they still are) the biggest Natural Gas producer in the United States and have the rights to a lot of untouched fields - which I assumed meant a steady future. Then again, any investment in a sense is a gamble. There have been rumors that bigger companies like Exxon Mobile are looking to buy them out.
Additionally, according to ETrade, CHK has a Gross Operating Margin better than 92% of companies in its industry and an Earnings per Share Growth Rate better than 86% of its peers in the same industry.
Do some research first, I don't want to pump the stock that I own too much! :-)
A mutual fund may be appropriate. Unfortunately I can't recommend mine since it is now a load fund (I got it when it was no load, so I have been grandfathered in) and I never pay a load. For an individual fund, the $ may not be in natural gas itself, but in the companies which own the lines which transport it. M* had an article on this not too long ago, but I can't find it on their site now.
Newhandle, that is a great point. EPB is a good company for the transport of Natural Gas, however it is a limited liability Corp. like most companies in that field - so look into the taxes on that before you buy.
I'll go back to an individual stock - XOM. Their recent purchase of XTO Energy makes them a major natural gas player, and they're already one of the worlds largest and most stable companies, with a fortress like balance sheet, a decent dividend (2.40%), a long history of share buybacks, and at $72 per share (12.89PE) they have room to grow. I see energy prices (oil and gas) only going up in the short and medium term, and when it comes to stocks, you don't get any safer and stable then a company like XOM.
Anybody here investing in natural gas? If so which stocks? And Why? Where do you see natural gas going in the future?
I'm new at this,so i'm looking for opinions.
Thanks!
Natural gas is not going anywhere. It will grow, but SLOW. And imagine the maintenance costs involving natural gas pipelines and disaster recovery and contingency planning. It's still an industry in its nascence. It will be good, if you do not need the money for 5 to 8 years.
Find the next bubble, and ride it, and get out before it bursts
Yup, Morningstar ran the article that MLPs are a good place. There is a website dedicated just to MLPs.
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Just look at his success with Time Warner
