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  • This Gas Fund Naturally Looks Good $FCG

    In the coming years natural gas is going to gain more ground as to the amount of industries it will penetrate and prove useful for. While its popularity increases along with the price this fund has a great chance of proving profitable to investors. This along with the spread of companies it has makes for a very good mix.

    In our opinion, First Trust ISE-Revere Natural Gas Index Fund (NYSEARCA:FCG) will be able to generate positive returns for investors due to the decreased downward pressure on natural gas prices. The fund is highly exposed to natural gas. We expect the Fed's economic stimulus to boost natural gas demand in the U.S. The increased natural gas usage in transportation, power generation, crude oil extraction, and manufacturing units, will help FCG to trade higher. In our opinion, FCG has bottomed out, and the stocks in its portfolio have a considerable potential to make use of the upcoming increase in demand. Moreover, if the Republicans win the upcoming elections, the index will have bright prospects. FCG decided to maintain the expense ratio at 0.6% until 2013.

    FCG Overview

    FCG is an exchange traded index fund, which delivers returns through the yield and the price of the ISE-Revere Natural Gas Index. The index has 31 stocks in its portfolio. Equity securities generate revenues from the production and exploration of natural gas. The index is correlated with the level of production, and the prices of natural gas. The major proportion of the fund investment, around 90%, goes into common stock, which forms the index. Out of the common stock, 96% of the investment is exposed to the energy sector, as shown in the graph given below. The investments are primarily in U.S. equity securities, including large capitalization, mid capitalization, and small capitalization companies. Moreover, the fund also invests in U.S. government securities, money markets funds, short term investments, repurchase agreements, commercial papers, and fixed income securities with maturities of less than one year.

    Shale Gas Boom

    Due to the discovery of horizontal drilling and hydraulic fracturing, natural gas production has witnessed a significant boom. The abundant supply of natural gas in the U.S. has exerted a downward pressure on prices, which had fallen below $2/MMbtu. Currently, natural gas prices have recovered to $2.8/MMbtu. For the decline in natural gas prices primarily, the First Trust ISE-Revere Natural Gas Index Fund has generated negative returns of 2.4%, as compared to a 17.3% S&P composite 1500 Energy Index return and a 9.3% Russell 3000 Index return. The fund has bottomed out, and has significant potential to post greater returns given the increase in natural gas demand.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: FCG, Oil and Gas
    Nov 20 10:56 AM | Link | Comment!
  • Look No Further, Your Next Investment Is Right Here $EPD

    The only thing a company can do to increase its attractiveness to shareholders better than increasing revenues is increasing dividends, and this company is doing both. This is a massive company that is poised to move forward in a big way, getting on board has never looked better.

    EPD is a buy at almost any time. When it has just announced two more dividend/distribution raises, it is even more of a buy. When it has a pipeline of projects set to add further to its earnings in the near term, it is again more of a buy. When its new expansions will increase exports, which should lead to higher US NGLs prices, it is more of a buy. This is a huge company with an enterprise value of $63.62B and a market cap of $48.35B. It has a total return since 1998 that is approaching 2000%. The S&P 500 return does not even begin to compare. Few companies have as stellar a record of success as EPD. It is currently trading at a PE of 19.92 and an FPE of 21.20. I am not sure why that last figure is not lower, but EPD's growth is astounding. Perhaps some think it will take until 2014 to really see things take off, but the growth stories of stocks do not get much better than EPD's.

    On September 20, 2012, Enterprise Products Partners LP (NYSE:EPD) announced that pending approval, it would increase its dividend to $0.65 for Q3 2012 and $0.66 for Q4 2012. EPD announced that several projects had exceeded expectations. This raise seems a done deal. EPD would not announce this unless it was sure to be approved. If you extrapolate the last raise, this means the dividend for EPD will soon be 4.83% annualized. According to the Associated Press these increases are due to "several projects having exceeded production expectations." AP did not specifically say which or why. However, EPD has huge infrastructure and it has huge growth projects that should see dividends move much higher in the near future.

    One of the good items has to be the start up of the second train at the Yoakum Natural Gas Processing Facility in the Eagle Ford shale. This was announced September 10, 2012. This will increase the extraction capability of the plant to 74,000 bpd of NGLs. EPD's Seaway Pipeline reversal opened in May 2012. I am sure both EPD and its 50% partner, Enbridge (NYSE:ENB), are profiting greatly from this. It has the capacity to bring 150,00 bopd from the log jam in Cushing, OK to the Texas Gulf Coast. It's utilization has to be near 100%. EPD plans to bring the first expansion of this pipeline (+250,000 bopd) online in Q1 2013. This too will get completely booked quickly, if it is not already. From the way EPD is gushing, this project may be ahead of schedule.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: EPD, Oil and Gas
    Nov 20 10:53 AM | Link | Comment!
  • Tightening Supplies Raises Oil Prices $BRENT $WTIC

    Global oil supply effects every country especially when its running low. Without certain countries being able to make up the difference it can only get worse. lets look at what that could mean to the price of oil.

    Tightening oil production worldwide could mean prices hitting $148 per barrel this summer, Texas billionaire investor T. Boone Pickens said Tuesday.

    Not even spare capacity from Saudi Arabia would be enough to make up the difference amid increasing sanctions against Iranian oil, Pickens said in an interview on "The Kudlow Report."

    "It's tight now. That's why you have Brent North Sea $126 and you've got WTI at $105," he said. "Global supply is tight. No, I don't think they can can cover. If they do, they'll cover it out of storage."

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    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: Oil and Gas
    Nov 20 10:53 AM | Link | Comment!
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