Everybody...gather 'round. I've had another revelation.
Between now and the fall, I highly recommend you guys buy up some energy stocks that are in the business of providing, drilling for, or re-selling natural gas. As many of you know, I am a plumbing contractor, and I build some homes. Up until about 10 years ago, gas was out of style. But for the past 10 years now, we have been piping the daylights out of houses with natural and LP gas fixtures. Fireplaces, furnaces, dryers, stoves, cooktops, outdoor grills, boilers, water heaters, pool heaters, space heaters, Modines, whatever else you can think of. Between the soaring construction boom of the past 10 years and the onslaught of popularity of gas fixtures, natural gas has been in huge demand. And it's been an easy sell, because the fact is, natural gas is clean and efficient. But some of the pool heaters we pipe in use up to 600,000 BTU's. Some of the houses my guys pipe in have 6 freakin' fireplaces, and 8-10 heating zones. That's a lot of gas. Now that all these people are hooked up and their houses and businesses are dependant on the gas....they are gonna get slammed for the bill. They can do without the pool heater, and they can do without the fireplaces. But they can't do without the heat and the hot water. They have to cook their food, and they have to dry their clothes. They have to pay. And they will. LP gas will also climb, whch it always does in the winter, along with heating oil, but it will climb unusually high this winter...just because natural gas prices are up there. People will not convert back to electric, because that will be too costly and the end result will be an inferior product. Anyway, once again, I have had a vision..and I am not the only one. Find me 5 charts of companies that provide natural gas, that AREN'T already up 100% since March. Well, that was smart money getting in and being willing to chase it. We haven't even seen the surge in natural gas prices yet, and they know it. They are just sitting back waiting. Natural Gas stocks are your winter 2001 craze. Last year you had the bio's, and the techs...this coming winter...those stocks will be distant memories and the chase will be in the energy sector. Be patient and use your investing capital...not your daytrading capital...and consider buying up a few of these stocks and just sitting on them for a while. the longer you wait, the more you will pay. Most of the techs are played out and are toppy. The bios, barring the occasional huge discovery or product launch are toppy. The energy sector is still riddled with 10 P/E's. They will get a much higher multiple this winter I beleive.
As you know, I am fond of the valuation of NGAS. I figure the symbol alone will be worth 20 this winter. NGAS has 2.5 million shares outstanding and traded at about 100 at one time..reverse split adjusted of course. They have just turned a corner and have started booking some profits for the first time in their operating history. I think those profits are here to stay too. With only 2.5 million shares, the upside to this stock coule be huge. It's not like it moves 100 million dollars with every point, but a mere 2.5 million dollars. And the float is small. Yes, some of you say that a small float is not so good, but then, it's the company, not the float. Look at GREY for an example...or Berkshire Hathaway for that matter. Supply and demand is the bottom line. Volatilty is often your freind, because you guys have the tools to play on it and you are fast and sharp about technicals.
I am looking at several others, but the bottom line is...you will probably be able to throw a dart and make money in most of them....especially those that trade on the Nasdaq. And don't underestimate what these companies will do in the long term either. There are a lot of people hooked up with a lot of nice new gas fixtures. They will be using them for quite some time. Gas has grown like cable in the past 10 years....but the suppliers have not really reaped the reward yet. This winter....they get theirs.
That's just an opinion. Do your own due diligence and make your own decision.
Oh, and by the way...if you happen to be one of those people that have nice new natural gas fixtures in your house, and you will be getting the bill for that gas this winter, owning the companies that are gouging you may prove to be a nice hedge. You can laugh every month when your utility bill arives.....:o) |
