Natural Gas Stocks: Better Than Oil
Oil prices keep slipping -- but Michael Hall says natural gas looks strong as ever.
Hall, the vice president of Oil & Gas Equity Research at Stifel Nicolaus, offered CNBC his insights -- and his top natgas stock picks.
He believes the market is oversold, due to investors misunderstanding the historical trend cycles -- and gas' relationship to oil.
"We have a strong seasonal outlook," he said. "Nine out of the last 10 years, we've seen prices climb" through autumn to December. He says the winter heating season should put a nice floor under natural gas prices.
Recommendations:
"We like larger cap, more liquid names," said Hall.
- Chesapeake Energy -- "the U.S.' leading natural gas supplier"
- Cabot Oil & Gas
- Petrohawk
- XTO -- After the firm's 2008 acquisitions "and the underperformance that's typical of such acquisitions," Hall expects a big XTO rebound.
____________________________
New from CNBC.com:
____________________________
Disclosures:
Stifel Nicholas expects to receive or intends to seek compensation for investment banking services from all of the companies mentioned above, in the next three months.
