Josh Young
Hedge fund manager, energy, value, special situations

Natural Gas Prices Surging, Driving Return Potential For This Leveraged Natural Gas Liquidation Play

Natural gas prices (NYSEARCA:UNG) have surged recently in response to colder than normal winter weather. As natural gas prices have moved up, so have the stock prices of natural gas producers, including Quicksilver (NYSE:KWK) and Ultra Petroleum (UPL). However, the stock price of the most levered natural gas play that I am aware of has actually declined substantially, likely due to tax loss harvest selling. This offers what seems to be a very attractive opportunity, albeit with a risk of permanent capital loss.

First, here is a chart of the abnormal cold weather. Note the higher than average "heating degree days" recently. This chart does not reflect the most recent winter storms of this past week,...

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