Natural gas has been pushed further and further down for the past few years, if looking at the United States Natural Gas fund (UNG) chart. According to Business Insider, Professor Mark Perry of the Carpe Diem blog noted that if adjusted for inflation, natural gas prices have reached a multi-decade low.
Reasons for the continuous price decrease include a warmer winter (heating costs were reduced), and increased supplies from easy drilling. Due to higher oil prices and environmental concerns though, more and more people are beginning to use natural gas for a multitude of purposes. With the interest in using natural gas piquing, some companies have to benefit from it.
Kapitall reported some points from Croft Leominster Inc., a value mutual fund with a “contrarian” perspective. According to Croft, since gas trades below the industry’s marginal cost of production we’ll see companies shutting down and going back into oil, which will slow supply and drive up the price of natural gas. And, he argues, since natural gas is already seeing increased demand, the shift in production will further stress the supply-demand issues that are good for prices in the mid-long term.
Business Section: Investing Ideas
The natural gas bandwagon is beginning to look inviting, and there are companies that stand to profit from a swing toward its use. Below is a list of companies that according to Morgan Stanley are heavily exposed to natural gas. Do you think these names will see an upside to the trend?
List sorted by market cap.
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:
1. Williams Companies, Inc. (WMB, Earnings, Analysts, Financials): Engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States. Market cap at $19.92B, most recent closing price at $33.89.
2. Spectra Energy Corp. (SE, Earnings, Analysts, Financials): Engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets in the United States and Canada. Market cap at $19.9B, most recent closing price at $30.49.
4. Sunoco, Inc. (SUN, Earnings, Analysts, Financials): Through its subsidiaries, refines and markets petroleum products, and manufactures chemicals in the United states. Market cap at $4.37B, most recent closing price at $40.63.
5. Targa Resources Corp. (TRGP, Earnings, Analysts, Financials): Through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. Market cap at $2.02B, most recent closing price at $47.51.
6. Crosstex Energy Inc. (XTXI, Earnings, Analysts, Financials): Through its partnership interest in Crosstex Energy, L.P., engages in gathering, transmission, processing, and marketing natural gas and natural gas liquids (NGLs) in the United States. Market cap at $707.99M, most recent closing price at $14.87.
(Written by Danny Guttridge)
Use Kapitall’s Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Williams Companies, Inc. (WMB, Chart, Download SEC Filings)
- Spectra Energy Corp. (SE, Chart, Download SEC Filings)
- ONEOK Inc. (OKE, Chart, Download SEC Filings)
- Sunoco, Inc. (SUN, Chart, Download SEC Filings)
- Targa Resources Corp. (TRGP, Chart, Download SEC Filings)
- Crosstex Energy Inc. (XTXI, Chart, Download SEC Filings)
New to Kapitall?
1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter