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Shishir Nigam

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  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    income hunter,

    Thanks for your comment. The kind of change you mention is happening all across countries. The 3-wheeler taxis and public buses in all major big Indian cities now run on CNG and just that change alone has caused a marked improvement in the air quality in these cities.

    As I mentioned in Part I of this article (youngandinvested.com/f...), Obama has launched $300 million worth of projects to bring alternative fueled vehicles onto the road, some of which involve natural gas powered truck fleets.

    For more analysis, check out my blog: youngandinvested.com
    On Oct 24 04:47 PM income hunter wrote:

    > NAT is already becoming the transportation fuel of choice. 18 wheelers
    > serving the port of LA are all natural gas. In southern California,
    > all the UPS trucks, post office, busses, and most municipal vehicles.
    > Here in Atlanta, all the busses and natural gas companies service
    > trucks are. The next step is for all municipal vehicles that return
    > to the same lot to be fueled daily are candidates. Then less than
    > truck load truck lines. 8 or 10 company terminals would cover most
    > of their service areas. Then a new tax based on the miles you drive,
    > not the gas you buy. New gas deposits found in the Rockies, the Bakken,
    > and Louisiana. Change coming.
    Oct 25 12:50 AM | Likes Like |Link to Comment
  • Next Time, Let Goldman Fail [View article]
    Reason why Goldman won't be allowed to fail anytime soon: www.washingtonpost.com...

    Here's the line in the article that puts it best: "The résumés of Bolten and Paulson illustrate the revolving door between Washington and Goldman Sachs."

    For more analysis, check out my blog: youngandinvested.com
    Oct 24 01:42 PM | 1 Like Like |Link to Comment
  • 15 Attractive Stocks for Increasing Dividends [View article]
    When I look at dividend stocks, especially those with sub-3% yields, I also look at the potential for capital appreciation. Because if I was looking for sub-3% yields..I could just own one of the many bonds that yield 3% which would be much safer than the stocks. I agree with David's point completely, starting off with a 1% yield and waiting for those yearly dividend raises is not an attractive proposition to me.

    On a side note, Peabody Energy (BTU) is one stock where I can see capital appreciation coming together with dividend growth. As a coal producer, BTU is the bashing boy of many investors who see coal usage only for its pollution generation. But the fact of the matter is that coal is still the cheapest and most available source of energy out there. China produces 70% of its electricity from coal (www.eia.doe.gov/emeu/c...) while India produces 53% of it from coal (www.eia.doe.gov/emeu/c...). While the data is slightly dated, coal demand is going to be around for much longer that people are ready to believe.

    For more analysis, check out my blog: youngandinvested.com
    Oct 24 01:38 PM | 4 Likes Like |Link to Comment
  • Ten Best Dow Stocks by Book Value [View article]
    I'd be a little careful picking up banks and other financial companies based on book value. They usually have huge book values just because of the sheer size of their balance sheets.

    Also, any liabilities that are parked off-balance sheet by these banks will result in an inflated book value. The ones where this measure has most value is probably with the consumer staples companies like KFT.

    For more analysis, check out my blog: youngandinvested.com
    Oct 24 12:42 PM | 1 Like Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    Something I'd love to hear some thoughts on: The Claymore Natural Gas ETF on the TSE (GAS.TO) has quite consistently outperformed the United States Natural Gas Fund (UNG). Check: finance.yahoo.com/echa...;range=5d;compare=gas....

    I wonder why that has been the case. GAS.TO tracks the Alberta natural gas, while UNG tracks the Henry Hub natural gas. I speculate the under-performance of UNG has to do with its monthly rolls. UNG should have finished its rolling into Dec futures on Oct 19th and at that time, the premium between Dec and Nov NYMEX futures was around 19%. At the same time, the premium between Dec and Nov Alberta NG futures was around 11%.

    Could that be an explanation?

    For more analysis, check out my blog: youngandinvested.com
    Oct 24 12:33 PM | Likes Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    bradiop,

    Agreed, EPD and KMP are also two very good players in the pipeline industry to look at. I chose to mention slightly smaller-mid scale pipeline companies for their growth potential.

    To see the largest players in the NG "production" area, this graphic is very helpful: www.wikinvest.com/imag...

    For more analysis, check out my blog: youngandinvested.com

    On Oct 24 11:34 AM bradiop wrote:

    > I'm surprised in mentioned gas pipeline Co's there was no mention
    > of EPD and KMP, both of which I thought were bigger than the one
    > mentioned.
    >
    > Agree on general theme and good article.
    > brad
    Oct 24 12:24 PM | Likes Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    oldmanlake,

    LNG might well be the future of natural gas usage and that would greatly expand the markets which have access to any one local natural gas source. Once that happens, natural gas would behave a lot more like oil, affected by global demand rather than just local demand.

    However, when I say future, I don't mean anytime soon. I mentioned in Part I of this article (youngandinvested.com/f.../) that at present, there are only 8 LNG terminals in the US. LNG requires major investment in ports to provide access to LNG tankers and in liquefaction and gasification plants on both ends of the transport route. As such, unless and until there is major investment in the infrastructure required for LNG, it continue to be just a "possibility".

    For more analysis, check out my blog: youngandinvested.com


    On Oct 24 11:23 AM oldmanlake wrote:

    > LNG or CNG is the bridge to the future for transportation in this
    > nation --- whether the eco-nazis realize it or not...... and they
    > may not allow this to be employed in their blind push for electric
    > vehicles.... this same bunch, while pushing electric everything,
    > is simultaneously fighting anything nuclear...... so WTH?
    Oct 24 12:21 PM | Likes Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    tizod,

    You point out a good strategy that would have been effective when the natural gas prices were still DROPPING, since the utilities/companies that you mention would be benefiting from lower costs.

    But we could well have seen the seasonal lows in natural gas prices - take a look at Part I of this article for my logic for being long: youngandinvested.com/f.../. As a result, many of the benefits to these companies may already have been realized in terms of lower costs.

    For more analysis, check out my blog: youngandinvested.com


    On Oct 24 09:41 AM tizod wrote:

    > What I would like to know is who is a BIG user of gas as part of
    > their COGS? I would want to buy a stock where the drop in gas price
    > will boost the bottom line. I would want a company that has had some
    > financial strain, using this to assume they did not hedge a large
    > portion of the gas price. I really have no idea who someone like
    > this might be, but a name that comes to mind is Calpine (they may
    > have other issues, so no recommendation). CPN is mostly nat gas production.
    > They were in bad financial straights not long ago. I have no idea
    > how to find out how "hedged" they are.
    >
    > Anyone research companies that will see a boost to earnings off a
    > low nat gas price?
    Oct 24 12:14 PM | Likes Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    Hi doublebogey,

    What you refer to as MLP's, I had refered to as royalty trusts. In hindsight, MLPs would have been a better description for what I was talking about. Thanks for bringing it up.


    On Oct 23 11:51 AM doublebogey wrote:

    > You kind of missed the boat. Mid stream MLP's are in for a very long
    > and steady bull market in appreciation and distribution increases
    > as nat gas usage increases regardless of the price of the gas itself.
    > Perhaps you are not aware they exist? Another reason to buy them
    > as you have a lot of company.
    Oct 23 01:47 PM | Likes Like |Link to Comment
  • Betting on Natural Gas, Part II: Investing Ideas [View article]
    COP also is another very good option. It has a wide base of operations and a solid balance sheet. Though in recent weeks, I feel it has gone up too quickly and might be due for some correction.

    I agree with your view redbaron, there are numerous sites that have been discovered in the US there could be shale gas and opportunities to utilize new drilling technologies. There is definitely a possibility of the US becoming fully self-reliant through the use of that new production, provided enough investments are made into it.

    For more analysis, head to my blog: youngandinvested.com


    On Oct 23 09:05 AM redbaron wrote:

    > While I can't claim any particular expertise on the subject, we are
    > long COP, XTO, HGT, and a few others as well. We think that one should
    > try to have some income from these investments, while waiting for
    > the strategy to work out.
    >
    > Natural gas has to be part of our country's overall energy policy,
    > or so we think, because, 1) we have so much of it, 2), it burns clean,
    > 3) we don't have to import it. We need to be doing more working toward
    > adapting this fuel for transportation uses. We are also long CLNE,
    > but that of course does not generate any income.
    Oct 23 10:42 AM | 2 Likes Like |Link to Comment
  • Investing in High-Yield Dividend Stocks [View article]
    To draw an analogy, picking a stock with the highest dividend yield is a little like picking the stock with the highest P/E. The higher the P/E, the more "perfectly" the stock is priced and the slightest let-down versus expectations will cause price drops.

    The higher the dividend yield, the more likely it is that the company is giving out too much by way of dividends and will have little room to maneuver financially - making it more likely to cut it when the slightest deterioration in conditions is experienced.

    Check out more analysis at: youngandinvested.com
    Oct 13 09:54 PM | 2 Likes Like |Link to Comment
  • Where Have All the Bulls Gone? [View article]
    It's hard to see this rally get any love other than that coming from the CNBC news anchors.

    Check out my blog: youngandinvested.com
    Oct 13 06:53 AM | 3 Likes Like |Link to Comment
  • Americans Are Not Suddenly Increasing Savings [View article]
    I think it might be more accurate to call them Fed-induced bubbles and downturns.

    Check out my blog: youngandinvested.com
    Oct 12 08:41 PM | Likes Like |Link to Comment
  • Research in Motion: Valuation Wall Street Cannot Deny [View article]
    Agreed, the massive drop after the quarterly results was quite the over-reaction. RIMM has been able to hold up its market share reasonably well in the face of competition from numerous entrants in the smart phone market. The Blackberry's own App Store is helping in its rebuttal to the iPhone as well.

    It was just unreasonable for analysts to be expecting RIMM to maintain the large margins that they have enjoyed in the past.

    For more analysis, check out my blog: youngandinvested.com
    Oct 12 04:52 PM | 2 Likes Like |Link to Comment
  • Four Stocks Rewarding Investors with Dividend Raises [View article]
    Reynolds - $0.90 provides a very impressive yield on a common stock. However, $0.90 dividend per quarter implies a dividend/share of $3.60 annually. Going by their latest financials, their LTM EPS was $2.13/share. That implies a 169% payout ratio. Even if I use the EPS for the year ended Dec 31, 2008 so as to leave out the bad quarters, it's a payout ratio of 79%. I hope they have some serious profits coming up in Q3 results to justify that dividend increase!

    RPM - RPM has an EPS of $0.958 for the year ending Aug 31, 09, implying a payout ratio of about 86%, again a pretty high payout.

    ConocoPhillips - As for COP, they haven't had a full year of positive earnings in either the 12 months ending June 30, 09 or even 12 months ending in Dec 31, 08. Going by the latest quarter alone, a $0.50 payout implies a payout ratio of 58%. Though COP has a good amount of cash cushion on its balance sheet. I'm looking at picking up COP as well.

    ONEOK - OKS had an EPS of $4.728 for the year ended June 30, 09, which translates to a payout ratio of 92% with a quarterly dividend of $1.09. Seems a little tight here as well.

    Increasing dividends can reflect confidence in the future but are just as likely the result of over-optimistic management projections.

    For more analysis, check out my blog: youngandinvested.com
    Oct 12 04:44 PM | 1 Like Like |Link to Comment
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