Tuesday, October 9, 2012

This Buy Signal Delivers an Average 42% Gain in Six Months


Natural gas is one of history's greatest bear markets. Prices have fallen 93% since peaking in December 2000. The companies that produce natural gas have suffered along with the commodity. They should do well if gas prices rise, but there is no way to tell when that market turn will come. Eventually, the price of natural gas will probably stop falling, but it's dangerous to call bottoms in any market.

A supply glut of natural gas was behind the bear market. At the same time, demand for oil and gasoline has led to higher prices in those markets. In 1999, crude oil traded for less than $12 a barrel, and now it is almost $90. Gasoline futures have gone from $1.03 a gallon to $2.80.

Diesel fuel has risen along with gasoline, with the retail price for diesel fuel over $4 a gallon. That is pinching profits of trucking companies and some have turned to natural gas for a solution.

 Trucks can be retrofitted to run on natural gas and companies can save money with this fuel. The problem is that trucks have difficulty refueling on long trips due, and the solution to that problem may come from the efforts of companies like TravelCenters of America (NYSE: TA), which operates more than 240 travel centers offering fuel, food and other necessities along the highway. The company is continually expanding and seems to have enough cash on its balance sheets to continue growing.  (more)

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