The 5 Best Stocks to Invest in Natural Gas for 2014
For investors looking to cash in on the natural gas boom in 2014, there are a number of ways to invest. One of the best plays is natural gas stocks.
Chesapeake Energy, (NYSE:CHK) – Chesapeake is the second-largest holder of natural gas reserves in the U.S. and is a potential takeover target, but strong financials and strategy will keep it independent for a while longer. The company’s share has nearly doubled over the past year and a half and is a current trend favorite among hedge funds and traders. While this is often a telltale sign that the company could stall, the long term play is there due to undervalued assets and plenty of room to grow. Keep in mind that all commodity driven stocks involve a degree of volatility to gain a decent position.
Westport Innovations, (NASDAQ:WPRT) – Westport makes natural gas engines for heavy vehicles. Due to a speculative rise a few years ago and a significant drop due to slow business development, Westport is a solid investment for 2014. The company has more cash than outstanding debt and insiders own a substantial portion of the company, both reassuring signs. Shares are emerging from the depths and investors could make an aggressive play based on valuation and outlook for growth as more heavy vehicles more to natural gas.
CF Industries Holdings, (NYSE: CF) – Cheaper natural gas is a solid move for heavy users like nitrogen producers. CF has received a huge bump from natural gas over the past five years. Its stock is up almost 400% and its dividend was recently amped up by 150%. The company is investing heavily to broaden its capacity to take advantage of cheap natural gas to rule our food creating profits for CF and American farmers since they’ll be buying cheaper American-made nitrogen for their crops.
Clean Energy Fuels Corp., (NASDAQ: CLNE) – Consumption of natural gas will boom in 2014 and investors looking for natural gas stocks to fuel our economy should consider Clean Energy Fuels Corp. Like Wesport Innovations, more trucking companies are making the switch from expensive, dirty diesel rule to cheaper, cleaner natural gas. Clean Energy Fuels is embarking on America’s Natural Gas Highway in efforts to build the infrastructure necessary to make the switch from diesel easier for the country’s trucking fleets. Customers ordered 70 percent more natural gas vehicles in the first nine months of 2013 than they did in 2012, and that trend doesn’t appear to be slowing down.
Cheniere Energy,(NYSE MKT: LNG) – Cheniere is one of several natural gas stocks working to get more American natural gas into global markets. Increasing U.S. exports is a trend that will continue and Cheniere is presently building two LNG export facilities along the Gulf Coast. Investors looking for solid pure plays on the natural gas export boom should take note.
There are many options for investors looking to play the consumption side of natural gas as well as the production. The need to continually generate tax revenue, more jobs, find alternatives for coal and oil (and independence from OPEC) make natural gas investing one of the safest bets in the investing world today. Consider your risk comfort level and how aggressive you want to get before getting started, then find companies, a couple ETFs and you’re well on your way.