Natural gas prices plunged to a 10-year low beneath $2 per million Btus earlier this month, and investment gurus such as Jeremy Grantham of GMO say that makes the commodity a screaming buy.
"Everyone who has a brain should be thinking of how to make money on this in the longer term," Jeremy Grantham writes in a report obtained in The New York Times.
The U.S. natural-gas market has a daily surplus of about 3 billion cubic feet, and gas company stocks have dropped by an average of 22 percent over the last year, according to The Times.
The excess gas has resulted from discoveries of fresh supply and new drilling methods.
But all that cheap product is pushing energy users, such as electrical utilities and trucking companies, to switch to natural gas. Others will surely join them, ultimately pushing gas prices higher.
Individual investors who want exposure to natural gas can do it most easily by purchasing stocks of natural gas companies. Higher prices should mean higher profits for these companies.
"Investors can make big money longer-term," Dan Rice, co-manager of the BlackRock Energy & Resources fund tells The Times.
TheStreet.com cites several trucking-related stocks that can benefit from that industry’s increased use of natural gas.
The list includes engine maker Cummins; PACCAR, which makes trucks and parts; Navistar International, which makes vehicles and engines; and Clean Energy Fuels, which sells natural gas.
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