energy investing
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Natural Gas Stocks: Time to Pick the Next Winner in LNG Export Race
There's a worldwide race heating up to supply the world with liquefied natural gas (LNG) and right now the U.S. lags far behind.
But that's about to change, with the U.S. expected to go from 0% of global LNG exports today to 9%-12% as early as 2020.
Investors should get ready because certain natural gas stocks will surge along with the exports.
So far, only Cheniere Energy Inc. (NYSE: LNG) is allowed to export LNG out of the U.S. to both free trade and non-free trade agreement (FTA) countries- it hopes to begin exporting in 2015.
And Cheniere's stock has been on a tear since earning that approval.
When the DOE announced the approval of LNG exports from Sabine Pass on May 20, 2011, Cheniere was trading at $7.69. The stock soared over 30% that day, finishing at $10.04, and today trades nearly 301% higher at $30.82.
Now, investors have another chance to profit from an LNG company.
Once again the catalyst will be approval from the DOE to export LNG to non-FTA countries.
And a non-FTA permit is the key with LNG exports. -
Natural Gas Companies Attempt to Make Fracking Safer
Hydraulic fracturing, or fracking, is the most important energy industry development in the past few decades, unlocking value for U.S. natural gas companies.
Its extensive use in the United States is completely reshaping the world energy scene.
But there is one question that lingers over the U.S. energy industry: Is fracking safe?
One of those saying fracking is 100% safe is sometimes controversial oil billionaire T. Boone Pickens.
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The Next Big Change in the Energy Markets
Thoughts are again turning to the next big change in the energy landscape.
As it unfolds, I have been working on how to exploit this trend and will be rolling out my recommendations when I appear at the MoneyShow in Las Vegas next Tuesday and Wednesday.
Of course, before I sketch my new approach to the Caesar's Palace audience, I'll outline it here first. You can expect more on this in coming Money Morning editions.
Today, I want to extend on Saturday's discussion and set the stage for the revisions I will be begin sketching out in my next article.
This is once again about hedging.
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How to Play by the Rules and Beat the Tax Man with MLPs
Paying taxes is about a pleasurable as a root canal. It's hard not to think about all that money going bye bye.
But it's inevitable and there's nothing we can really do about it, I guess.
However, tax day does bring to mind something quite a bit more positive: Like how to make money in the energy sector.
Actually, that's not as much of a stretch as you might think. That's because the bridges are already in place between how taxes are paid and energy returns.
Right about now, some of you are probably thinking I will start talking about energy sources like renewables that survive on government tax concessions.
Nope.
Or perhaps you might think this is going to be a discussion of tax write offs for certain field projects that utilize public land.
Wrong again.
And unless you are prone to the more fanciful, your thoughts should not be wandering toward squirreling money away on a small island somewhere.
Because there has been a much more practical approach that's been generating success for a while now.
This is how you play by the rules and still beat the taxman in Washington.
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This Shifting Balance Will Have a Huge Impact on Energy Investors
I have written several times in Oil & Energy Investor about the shifting energy balance worldwide, stemming from the need to prioritize among both traditional and new sources.
This will have a huge impact on how you invest in the sector.
As the new balance emerges, we will see a realignment of global energy prices, and both the sourcing and use of energy will open up significant opportunities worldwide.
We are already beginning to see the revisions working themselves out among the world's most developed nations.
Yet this time around, the changes will have the most positive effect on those regions usually left out of the picture. These regions have the lowest economic diversification, relying largely on sporadic, inefficient, and ecologically damaging energy sources.
Because of high pricing considerations - prompted by collapsing power generation, rusting refineries, and deteriorating delivery infrastructures - people in developing countries are usually cut off from market expansion taking place elsewhere.
In spite of such problems, these countries will provide major demand increases going forward, resulting in significant changes to the international market landscape.
And a damaging cycle that's been churning for half a century will begin to break down...
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Why I Cancelled Everything in Germany and Took the Next Flight to Dubai
Something big unfolded on my trip to Frankfurt last week.
It began with meetings in Germany over natural gas prices, but morphed into an interesting sidebar on the impact government subsidies have on energy prices.
As I noted last week, a recent International Monetary Fund (IMF) staff report concluded that public-sector support largely created more harm than good.
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Investing in Clean Energy Stocks Just Got More Risky
Despite its promising future, clean energy stocks have proved to be an investing minefield.
Even China-based clean energy stocks are no longer a safe haven. Yesterday (Monday) Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) defaulted on its debt.
Heavy losses caused by plummeting prices for solar panels - which fell 73% from 2010 to 2012 - left Suntech unable to make the payment on a $541 million bond that was due Friday.
The news caused Suntech stock, already down 80% over the past year, to slip another 10%.
While numerous U.S. renewable energy companies have faltered, most notably the 2011 bankruptcy of solar panel maker Solyndra, Suntech is the first Chinese clean energy company that could go under.
What's new is a reluctance on the part of the Chinese government to keep pouring subsidies into money-losing companies.
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Watch What Carl Icahn Does to These Energy Stocks
Energy stocks have been largely left behind in the recent stock market rally - except for those with interest from activist investors like Carl Icahn.
You see, concerns about global demand as well as political pressure to focus on alternative energy have weighed on energy stocks. So have the low price and oversupply conditions in the natural gas markets.
Many of these energy stocks trade at what seem to be very low prices compared with the assets owned by the corporations and their future prospects.
This has attracted the attention of many activist investors looking to force the share price to unlock the real value of the underlying corporation.
One of the best-known activist investors, Carl Icahn, has accumulated several positions in leading energy companies in the past year because of low prices and under-valuations.
Take, for example, what Icahn's done with CVR Energy Inc. (NYSE: CVI).
Icahn owns 83% of CVR, a refiner that has seen its stock price soar recently as refining margins have improved. The company also has a fertilizer business that is a major beneficiary of lower natural gas prices.
The stock has better than doubled in the past year so it would be foolish for investors to chase the shares now.
But CVR does serve as an example of the sizable returns Icahn is looking to achieve in his foray into additional energy investments, like the following two stocks he's been accumulating.
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Why Oil Refiners Are Among the Best Energy Stocks to Buy Now
Shale oil production continues its upward path, increasing overall U.S. oil production and making specific groups of energy stocks among the best to buy right now.
In fact, the U.S. Energy Information Agency (EIA) reported last month that domestic oil production surpassed the 7 million barrel a day level, the highest point in nearly 20 years. Production this year, the EIA says, will rise by another 14%.
This is obviously good news for the companies producing that oil, and it gets even better. Many industries outside the energy sector, including chemicals and railroads, have benefited from the shale boom.
But there is one subsector in the energy industry that has reaped the rewards of plentiful oil from the Bakken and other areas more than any other, and that's the refining industry.
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A 795,000 Mile Long Pipeline to Big Energy Profits
At the request of a major player in oil and gas pipelines, I was given a major task.
I had to estimate how much of the U.S gas and oil infrastructure needs to be replaced by 2025.
Then I needed to estimate the extent of additional connectors that would be needed to handle new domestic hydrocarbon developments.
And you thought Super Bowl Sunday was a lot of pressure.
I have done these estimates before… but something different popped up this time around.
Each time I crunched the figures, a new record amount emerged. Now while my client is in the tubular business, the sector that provides the metal needed to construct pipelines. His interest was straightforward enough – what volume is his company likely to see in the next 12 years?
Well, there are two dynamics here.
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