(List compiled by Becca Lipman)
The Stock Advisors‘ Nathan Slaughter has released his newest addition to his “Top Growth Picks” portfolio. His choice: Clean Energy Fuels (CLNE), “a provider of natural gas as an alternative fuel for vehicle fleets.”
Why? Let’s explore…
Natural gas is a cheaper fuel than oil and diesel fuels. It also burns cleaner than oil. According to Natural Gas Vehicles for America (NGVA) over 98% of the natural gas consumed in the America comes from North America (nearly all from USA, the remainder from Canada).
Furthermore, as far as quantity (and irrelevant of environmental concerns) the US has an impressive amount of natural gas resources. “The Potential Gas Committee estimates that the U.S. has a future supply of more than 100 years “
Cheap, plentiful, and local? Go on…
Enter the increasingly popular natural gas vehicle (NGV). To date, there are over 13 million worldwide. In December of 2010 the United States ranked 14th for ownership with 112,000 NGVs. Pakistan ranks #1 with 2.74 million NGVs. Total production has grown exponentially from 1991 to 2010, and are expected to continue accordingly.
However the vehicles have never been very travel friendly – natural gas refills are much harder to come by than the traditional oil pump. With uncertainty of where its next refill will come from, NVRs have generally been limited to local purposes such as taxis, delivery trucks, and municipal service vehicles.
This hurtle is about to be addressed.
Clean Energy Fuels has been the happy recipient of $150 Million dollars, courtesy of Chesapeake Energy, for the purpose of “the development of approximately 150 LNG truck fueling stations at strategic truck-stop locations along major trucking corridors to form the backbone of “America’s Natural Gas Highway.”
As this cheap fuel is made increasingly available, demand for natural gas vehicles, and thus natural gas, increases. You can bet that the natural gas industry is prepared to reap in the benefits.
Interested in exploring the natural gas industry? Here’s a list of the main players exposed to this trend:
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1. BP plc (BP): Major Integrated Oil & Gas Industry. Market cap of $143.45B. Current price at $45.04. BP is one of the world’s leading oil and natural gas companies. Their main activities are exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; and manufacturing and marketing of petrochemicals. Reported sales and other operating revenues for 2010 at $297 billion. The stock has gained 20.31% over the last year.
2. Chesapeake Energy Corporation (CHK): Independent Oil & Gas Industry. Market cap of $22.59B. Current price at $34.32. Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition and production of onshore natural gas and oil reserves. It is the second-largest producer of natural gas and a Top 15 producer of oil and natural gas liquids and the most active driller of new wells in the U.S. Exhibiting strong upside momentum–currently trading 6.9% above its SMA20, 12.49% above its SMA50, and 19.48% above its SMA200. The stock has had a good month, gaining 18.24%.
3. Clean Energy Fuels Corp. (CLNE): Gas Utilities Industry. Market cap of $1.13B. Current price at $16.08. Clean Energy Fuels is the leading provider of natural gas (CNG and LNG) for transportation in North America. It has a broad customer base in the refuse, transit, ports, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, across the United States and Canada. The stock is a short squeeze candidate, with a short float at 25.36% (equivalent to 7.13 days of average volume). Exhibiting strong upside momentum–currently trading 6.29% above its SMA20, 14.56% above its SMA50, and 13.21% above its SMA200. The stock has had a good month, gaining 20.47%.
4. Cheniere Energy Partners LP. (CQP): Oil & Gas Pipelines Industry. Market cap of $2.93B. Current price at $18.23. Cheniere Energy Partners is a partnership formed by Cheniere Energy to own and operate the Sabine Pass in western Cameron Parish, Louisiana. The company loads, transports and unloads liquid natural gas to US terminals using specially designed ships, trucks, pipelines and assorted transportation methods. The stock has gained 11.34% over the last year.
5. Devon Energy Corporation (DVN): Independent Oil & Gas Industry. Market cap of $33.29B. Current price at $78.29. Devon Energy Corporation is a leading independent natural gas and oil exploration and production company. Devon’s operations are focused onshore in the United States and Canada. We also own natural gas pipelines and treatment facilities in many of our producing areas, making us one of North America’s larger processors of natural gas liquids. It’s been a rough couple of days for the stock, losing 6.7% over the last week.
6. EOG Resources, Inc. (EOG): Independent Oil & Gas Industry. Market cap of $27.38B. Current price at $101.66. EOG Resources, Inc. is one of the largest independent (non- integrated) oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom and China. The stock has gained 5.27% over the last year.
7. Cheniere Energy, Inc. (LNG): Oil & Gas Drilling & Exploration Industry. Market cap of $593.69M. Current price at $10.4. Cheniere Energy, Inc. own 90.6 % of CQP (Cheniere Energy Partners LP,) to own and operate the Sabine Pass. The company is engaged in exploration for oil and gas reserves. They are currently involved in a joint exploration program, which is engaged in the exploration for oil and natural gas along the Gulf Coast of Louisiana, onshore and in the shallow waters of the Gulf of Mexico. The stock has had a good month, gaining 23.35%.
8. Newfield Exploration Co. (NFX): Independent Oil & Gas Industry. Market cap of $9.08B. Current price at $66.97. Newfield Exploration Company explores, develops and acquires oil and natural gas properties primarily in the Gulf of Mexico. It’s been a rough couple of days for the stock, losing 7.53% over the last week.
9. Southwestern Energy Co. (SWN): Independent Oil & Gas Industry. Market cap of $15.51B. Current price at $43.86. Southwestern Energy Company is a growing independent energy company primarily engaged in natural gas and crude oil exploration, development and production within North America. According to their website, “Our primary business is the exploration for and production of natural gas within North America, with our current operations being principally focused on development of the unconventional gas reservoir located on the Arkansas side of the Arkoma Basin, which we refer to as the Fayetteville Shale play.” It’s been a rough couple of days for the stock, losing 9.06% over the last week.
Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.