JAC

Why Are Natural Gas Producers Expanding Production So Aggressively?

Making Sense of all the above and more only for buying, selling, shorting purposes tells me there is no clear cut case for any action.

CONTEXT
UNG is way down but the 7 primary/large mostly gas producing firms are up and not strongly correlated with the price of gas, esp. short term (CHK, APC, HK, DVN, XTO, APA, SWN).

Their lows corresponded roughly with the S&P's low in March when they were roughly half or less their 2008 highs.

DEMAND PLUSSES
Co. prices probablly rising since March because they were so low and hopes of a economic turnaround that results in more gas demand. Looks like demand won't go down from here and may be encouraged higher by cap and trade, green etc.

DEMAND MINUSES
Can't think of any highly probable ones.

SUPPLY PLUSSES
Rig count has dropped almost 55% in 12 mo. so many have to be expecting higher prices in future for gas as Mark Antony pointed out.

SUPPLY MINUSES
Current supplies are at nearly all time highs; near capacity and polls of industry folk show that condition is expected to persist probably because of horizontal drilling and the idea expressed by several above that they have to keep producing and selling for many reasons.

LNG from overseas is a $4 possibility sooner rather than later.

My conclusion is long stability of approximately $4 natgas. And if you take that and analysts following the 7 company's EPS estimates for the next two quarters, you see estimates about where they are for the just reported quarter. So if they can make OK money now at $4 they can do it for some time. I don't expect any substantial changes in the prices of the company's stock.

Don't Overlook the Unemployed Who Lack College Degrees

Doctor:
I very much appreciate all of the 15 or so previous articles of yours that I have read and "follow" you on Alpha. However, this one is misplaced - it belongs on some social commentary page, not one devoted to finance.

Now I'm a Lagging Indicator Too

Well best of luck in the new endeavours. I am sure you will do well (your postings which I follow, show you have the smarts, diligence and patience to do well).

Parlux Shareholders: A Buyout Offer in the Offing?

Certainly there was manipulation of stock price when Lekach ran the company nearly into the ground and further manipulation would be consistent with a buyout. Its the perenial problem with these $20m market cap companies. Problem for a cheap buyout is that with average daily volume being only .5% of the float - the weak hands folded already.

Barron's Bill Alpert does a a fascinating interview of Off Wall Street Consulting Group founder Mark Roberts. 80% of Roberts' ideas over the past 15 years have made money, and his shorts have outperformed the Russell 2000 by an average of 22%/year since 1995 (track record).

You guys ought to pay Barrons. Three articles on the front page all takeoffs of Barrons articles. Don't you think we read Barrons?