![]()
- AIG Board OKs CEO Pay; Benmosche Agrees to Stay
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Deere Reports Quarterly Net Loss, Revenue Falls
- Tiffany Profit Higher Than Expected; Raises Outlook
- Americans Ditch Planes for Trains this Thanksgiving
- Obama Reiterates Commitment to Boost US-India Ties
- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
- Call Me Crazy: Confessions of a Black Friday Shopper
- Turkey Day 101: How Well Do You Know Your Bird?
- Why You Should Play the Reflation Trade: Stock Picker
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Obama Reiterates Commitment to Boost US-India Ties
- The Social Media Gaming Threat
- Japan Export Rebound Eases Fear of New Recession
- Australia Wheat Exporters Face Challenges: GrainCorp
- Wednesday's Economic News Crunch Could Tilt Markets
- NBA D-League On The Rise
- Americans Ditch Planes for Trains this Thanksgiving
The seemingly endless surge in energy prices is lightening wallets at gas stations everywhere. But it's also a potential bonanza for investors who have a multitude of ways to play the astonishing bull market run.
![]() |
CNBC |
As analysts continue to debate whether there's an energy bubble, market pros aren't wasting their time. Instead, they're focusing on how to profit from the trend.
"There are so many excellent ways to play the energy market," says Jordan Kimmel, a hedge fund and mutual fund manager at Magnet Investment Group in Randolph, N.J. "Everyone keeps looking over their shoulder to figure out where the top of the market is going to be and not recognizing how deep this global explosion is. This is not a supply interruption increase, this is really demand-driven."
To be sure, there are plenty of risks in the strategy. Should the oil boom suddenly go bust that would spell trouble for a variety of investments. At the same time, if prices continue to rise that also would put pressure on major producers, as would the potential of windfall profits taxes that Congress continues to discuss.
As such, Kimmel is playing the energy market with diversification though a number of angles: Pipeline builders, natural gas suppliers and even alternative energy. Exploration companies have been popular among money managers, and President Bush's announcement Wednesday that he will encourage Congress to reverse a ban on offshore drilling likely will boost the industry.
Kimmel's plays include pipeline companies BP Prudhoe Bay Royalty Trust [BPT
Loading...
()
] and Persian Basin Royalty Trust [PBT
Loading...
()
]. Both pay solid dividends and, because they are focused on transporting fuel, are not subject to price fluctuations.
In natural gas, Kimmel recommends Contango Oil & Gas [MCF
Loading...
()
] and Warren Resources [WRES
Loading...
()
]. His top alternative energy play is Canadian Solar [CSIQ
Loading...
()
].
"Every guy's out there looking for the guy who's going to call the top," Kimmel says. "That's definitely not going to be me, and it's not going to be here."
Big Oil or No Big Oil?
Some investment advisors are staying away from the oil majors on the thinking that prices are too volatile and a big surge can have a negative impact on the major producers.
But Peter Miralles, president of Atlanta Wealth Consultants, is playing the entire sector and isn't afraid of stalwarts like BP [BP
Loading...
()
] and ConocoPhillips [COP
Loading...
()
].
"It's the same theme we've been on before--pretty much anything in energy. With prices where they are, they're going to continue to make a lot of money," Miralles says. "A 10 percent correction is nothing in the commodity area."
Elsewhere in the sector, Miralles likes companies that make the machinery and equipment used in petroleum, including National Oilwell [NOV
Loading...
()
], FMC Technologies [FTI
Loading...
()
] and Weatherford International [WFT
Loading...
()
].
He also is in coal, with recommendations for CONSOL Energy [CNX
Loading...
()
] and Massey Energy [MEE
Loading...
()
].
Natural gas also has the attention of John Massey, portfolio manager at AIG SunAmerica Asset Management, who believes a high trading ratio compared to gas, a warm summer trend and the possibility of a severe hurricane season as bullish factors.
In that industry he likes Ultra Petroleum [UPL
Loading...
()
], a company based in the Rocky Mountains that will benefit from the construction of a new pipeline that will greatly help with distribution.
Generally in energy, he recommends Schlumberger [SLB
Loading...
()
] for its big international base and ability to get into countries like Russia and Venezuela, which are more difficult places for US-owned companies.
And he says Cameron International [CAM
Loading...
()
] is a strong company for playing offshore and deep water drilling.
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.













