The Single Best Way to Make Money in Natural Resources

Where are the best opportunities right now in natural resources?

The obvious answer is the companies that are digging the stuff out of the ground.

But to find tomorrow's next big winners, you also have to look at what's hated.

For example, no other natural resource has been shunned during the past few years quite like natural gas. Prices have rebounded sharply since April, but that's nothing compared with where prices were before.

Shares of high-quality producers have barely responded -- but that type of disconnect is always resolved in time.

Most industry execs say natural gas will need to hit at least $5 per thousand cubic feet (Mcf) before they start revamping their budgets and directing more drilling rigs and resources back into gas fields such as the Haynesville Shale.

So we've got a long way to go before the industry turns up the production faucet.

But if gas reaches $5 per Mcf, then cash flows should explode for low-cost producers like Ultra Petroleum (NYSE: UPL). The company can turn a profit with gas as low as $2.88 per Mcf -- and it has 5 trillion cubic feet of reserves waiting to be sold.  (more)