Baker Hughes (BHI) put out its rig count again last week, and I'm just updating with the data. The natural gas count slipped to 7-year lows, as producers continue to shut off supply (data via Reuters).

• The number of rigs drilling for natural gas in the United States fell 7 this week to 665, the lowest level in more than seven years, according to a report on Friday by oil services firm Baker Hughes in Houston.

• U.S. natural gas drilling rigs have been in a mostly steady decline since peaking above 1,600 in September, and now stand at 869 rigs, or 57 percent, below the same week last year. It is the lowest natural gas rig count since May 3, 2002, when there were 640 rigs operating.

• Tighter access to credit and a 70 percent slide in natural gas prices to about $3.50 per mmBtu after peaking above $13 last July have forced many producers to scale back drilling operations. But with the natural gas drilling rig count now firmly entrenched below 700, and monthly production down four straight months through June, some analysts expect to see the supply-demand balance tighten soon.

The Association of American Railroads released their weekly rail traffic report again and it showed additional year over year declines.

AAR Reports: Rail Traffic Remains Down Year Over Year

Found an update on the US natural gas rig count via Reuters.

• The number of rigs drilling for natural gas in the United States unexpectedly rose again, the second gain in seven months, according to a report on Thursday by oil services firm Baker Hughes in Houston.
• The report showed U.S. gas drilling rigs edged up 1 to 688 this week, still 851 rigs, or 55 percent, below the same week last year, when there were 1,539 gas rigs operating.
• Tighter access to credit and a 70 percent slide in natural gas prices to about $3.50 per mmBtu, after peaking above $13 last July, have forced many producers to scale back drilling operations.
• But, with the natural gas drilling rig count below 700, most analysts expect to see year-on-year output declines soon, which should help tighten the overall supply-demand balance.

This hits on the important short-term factors for gas. Supply is still elevated, and while the rig count went up by one this week, it is substantially down from last year in efforts to balance supply and demand. For gas prices, this could be more uncertainty, but likely some bouncing around at these levels until demand picks back up.

Spin-offs often make for interesting investments. There are not that common, but tend to perform well, especially in their first couple of years as a stand-alone stock. This has been written about in a few areas, and specifically by investor and author Joel Greenblatt, as this type of stock is one of his favorite investments.

Let's look at what spin-offs are and why they outperform.

Today I'm taking a look at Invest Like a Dealmaker by Christopher Mayer. Christopher writes the Capital & Crisis newsletter, and this book takes a look at his investment methods. After reading this book, I'd summarize it as a how-to guide for the value investor. The author's focus is to teach investors ways to uncover value by various methods (formulas for stock screens, how to follow fund managers, finding undervalued stocks, etc).

The author references many, many investors, and maybe even a few too many. He refers frequently to some well known ones like Seth Klarman, Joel Greenblatt, and Bill Miller. A lot of his theory involves following these gurus, and he explains why. I wouldn't consider this just a recycling of these well-known investors, and their theories; Mayer does add some substance as to why these guys are worth following.

Today's book review is The Gone Fishin' Portfolio by Alexander Green. Mr. Green is the investment Director of The Oxford Club, as well as Chairman of Investment U.

The Gone Fishin' Portfolio is a clear and concise read. It is written for the individual investor who has limited to moderate financial knowledge. And lets face it, this is a huge audience. He says it best in the introduction, "No one cares more about your money than you do." Its a simple sentence, but its so true.

I've decided to do a follow up on Geothermal Energy. Back in December of '08 I did some research on the industry, which you can read here:

• Alternative Energy: A Look at Geothermal
• More News on the Geothermal Front

Since that point, we've seen economic pressures increase, and very recently (maybe) improve. The key to growth in the Geothermal, or any alternative energy for that matter, relies on a couple of key factors:

Last week I did some work on the casual restaurant chains, and their recent strong performance. This was posted over at Fund My Mutual Fund. For the full analysis of PF Chang's (PFCB) and others, head over there. The thesis here is that restaurants are boosting quarterly earnings by cutting costs and taking advantage of lower commodity prices and decreased analyst expectations.

I just wanted to follow up a bit here as I read a Barron's Article Tuesday morning about PF Chang's. They are basically taking the same viewpoint as mine, that shares are getting a little too high, and that it will be tough to sustain earnings in the current fashion.

In any downturn, cash is always harder to come by. In this environment, capital is especially hard to get. We've all heard the phrase "cash is king", and its usually true. But in this environment, it really is true. Companies with extra cash are better positioned to create a better competitive advantage over their competitors. This can be for a couple of reasons:

• Many companies need access to capital to finance expansions, or at a minimum daily operations. Companies with extra cash have no worries about getting credit downgrades or accessing capital if they need it.
• Cash rich companies can use the downturn to acquire smaller companies, or even competitors. When the market overshoots to the downside with market valuations, its a great time for companies with lots of cash to scoop up deals.
• Companies with lots of cash will always be attractive to investors, especially during the typical "flight to quality" that happens during market panics. Investments in these companies usually hold up better than their counterparts as investors get defensive.

In a recent interview, Cisco (CSCO) CEO John Chambers said "companies with cash are king, queen and the royal family." Cisco has close to $27 billion in cash and short-term investments, and the total continues to climb. hambers says Cisco is always aggressive in making acquisitions during downturns. He says the best time to make acquisitions is in downturns.

We've seen the headlines declaring the 2009 deficit to exceed $1 trillion, and with the massive economic stimulus bill coming, we appear ready to add to it. Although Obama claims the bill will have no pork attached to it, but I'm a little skeptical. They will need to come up with new ways to increase government revenue, and here's one possible one:

With fuel prices low due to a economic slowdown and demand destruction, those is Washington might seize the opportunity to raise the federal gas tax...

Throughout this consumer-led recession, we've seen the trading-down from specialty goods and name brands to generic goods and discount items, not out of choice, but necessity. Wal-Mart (WMT) has seen strong sales, and that trend should continue. But I'd take it a step further and take look at dollar stores. Family Dollar (FDO) posted strong results and raised their profit outlook. There aren't many companies doing that right now.

The company expects full-year sales to rise 4 percent to 6 percent, up from a prior outlook of 3 percent to 5 percent. On a same-store basis, it forecast a sales gain of 2 percent to 4 percent; it previously called for a rise of 1 percent to 3 percent.

Swiss industrial electrical giant ABB (ABB) is at the heart of the infrastructure discussion right now. They also should be at the heart of discussion of solutions for energy efficiency and sustainability. The combination of the two puts ABB in a great position moving forward.

A bit about the company

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 120,000 people.

Of all the alternative energy sources being discussed, I think geothermal gets the least amount of discussion, especially considering the positives.

For those who don't know, geothermal energy is energy from heat stored in the earth. It is captured in various ways, but it typically involves drilling into the earth's core and extracting hot water and steam from different depths.