Natural Gas Insiders are Buying This Sector Like Crazy
Eugene Dubay Bought $653,700
I've been writing about the great Ring of Fire that is changing America for about a year now.
If you don't know, the Ring of Fire is the circle of natural gas and oil that runs up the Appalachian Mountains across the border states and back down the Rockies into Texas.
Fracking technology has made this energy abundant and easy to get to. It has made millionaires out of couch potatoes.
One of the companies I recommended in a special report I wrote about the Ring of Fire is up 37.64%... The second I sold for 47.04% gains and a third, which I bought more recently, is up 15%.
But the run is just getting started.
I know you've heard about fracking before, but you should pay attention — because you might miss one of the last profit opportunities in shale.
I hate to tell you this, but the dirty little secret is that the fracking market is changing. It's changing not only the companies that produce inexpensive energy, but those that use it and transport it.
The biggest change lately has been the price.
In case you've missed it, this is the highest price natural gas has seen since October of 2011:
The price of natural gas doesn't usually go up in the spring, but this year has been unseasonably cold... so much so that prices went up on falling inventory.
Last week the Energy Information Administration reported stockpiles declined 146 billion cubic feet, compared with a decline of 66 billion cubic feet in the same week a year ago. This is also at a time when natural gas production has been flat, as unprofitable wells went off stream.
But there are other factors beyond a cold spell that drive NG prices — one of which is the switchover from coal-fired electric plants to natural gas-burning plants, as well as the increased use in transportation. Natural gas use in power plants is up 60% since 2000 and is about to replace coal as the largest fuel source for electricity in the United States.
But what's really stoked my interest is all the insider buying in NG companies...
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Insider Buying in NG
For example, at Williams Partners L.P. (NYSE: WPZ) insiders bought $142 million worth of shares.
At the fracking company Triangle Petroleum Corporation (NYSE: TPLM), Hersh Kenneth bought $55 million worth of shares.
Forbes Energy Services (NASDAQ: FES), a small, $3.75 company, saw $1.26 million worth of insider buying. Forbes is an oilfield services contractor that works on well sites for natural gas and oil in the United States.
Patrick Mulva, Vice president and Controller at ExxonMobil (NYSE: XOM), bought $978,945 worth of shares of his company. XOM counts because the company owns more natural gas than it does oil.
At Atlas Pipeline Partners (NYSE: APL), President and CEO Eugene N. Dubay bought $653,700 worth of his shares last week.
I could go on, but you get the point: Insiders at NG companies are buying.
They obviously think their companies are undervalued and will go up in the near future.
Sure, they could be wrong. Insiders lose money just like everyone else. But it's hard to ignore when insiders are buying across the sector.
They are buying because Wall Street is missing the picture on the pipeline expansion that has happened over the past few years.
It's true Obama stopped the Keystone Pipeline, which he could do because it crossed the border into Canada. But he couldn't stop the flow of inexpensive energy within the states...
Take, for example, Kinder Morgan (NYSE: KMP). According to its latest earnings, pipeline volume was huge — and natural gas was the big winner. Its NG pipelines earned the most money for KMP: $474 million in Q4. That's a 64% increase over last year.
The growth came from higher volumes across its network — more specifically, the boom in production in the Eagle Ford Shale contributed to higher volumes on its Texas intrastate pipelines, while higher demand for natural gas in power generation boosted volumes on its Tennessee Gas Pipeline system.
The natural gas revolution is just entering the second or third inning...
There are a lot of ways to make money as the fruits of fracking are first distributed and used in the United States — and even more when it's finally exported to the high-priced Asian market.
I'm going to drive this car 'til the tires fall off and burn. Join us before it's too late.
All the best,
Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page.