Natural Gas Price Trends?

By jmatthew3, March 13, 2013

Travis, what do you think about the natural gas price trend? Do you think we’re at the beginning of an uptrend? I’m interested in royalty trusts that pay out a dividend based on natural gas production (e.g., San Juan Basin Royalty Trust – SJT – as well as others).

The sector has been pretty beat up, but if gas prices really hit bottom at around 2 in early ’12, and we’re on an uptrend, it might be a good time to buy into some of these trusts.

Also interested on your thoughts on HCSG – Healthcare Services Group. I’ve made some really good money on it, and it seems to have a really great demographics-based story (food, laundry, janitorial services to nursing homes).

Curious on your take – thanks!

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2 Comments on " Natural Gas Price Trends?"

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Anonymous Questions
HCSG sounds interesting from your description but I’ve never looked at them, will throw them on the pile for perusing in the future. Natural gas seems to me like it’s going to be in a range for a long time — prices rise a bit when the more expensive wells are shut in, fall a bit when production is restarted, it’s a balancing act and down in this neighborhood it seems like future price expectations have finally been tempered so some of the land rush for natural gas acreage has gotten more sane, which means we’ll get to the point… Read more »
Matt Energy is sort of my thing. So are options. Have you considered using a cash-secured put selling strategy? If you are not familiar, visit the CBOE website on the strategy. With natural gas prices likely to very slowly drift upward due to rig counts falling as companies try to control supply, some of the growth plays will likely do better than the income plays. I think this is especially true since once nat gas gets into the $4s there will be a lot of political pressure to hold the line. Thus, there will not be a lot of spill… Read more »