GO
Loading...

How to Play Natural Gas Stocks

Natural gas companies have been trading more like oil stocks, rather than with natural gas futures — and “Fast Money” experts staked out ways to play the sector.

“You’re going to see a dislocation happen, probably in the next quarter or so,” trader Steve Grasso of Stuart Frankel said Tuesday.

Companies such as Comstock Resources, Carrizo Oil & Gas and Goodrich Petroleum, he said, could start to trade lower even with stabilization in the price of oil.

Grasso also noted that CRK saw its share price pop “because they’re buying more acreage — for oil.”

One way to play the sector: Avoidance.

Video: Oil, Gold Outlook for Wednesday

“Stay away from the mid-capitalized names,” he said. “Stay away from the lower-tier names because those are the ones that are going to get hit.”

Trader Joe Terranova struck a similar note.

“There has been a fundamental shift for a lot of these companies that were more focused on natural gas to get oilier,” he said. “These are names that are learning to live in an environment of $4 natural gas.”

Terranova said there were still some potential opportunities but issued one caveat: “Oil is still the trade.”

Trader Pete Najarian said he moved out of Exxon and into ConocoPhillips, which is headed for a split into two separate businesses.

“It’s probably undervalued,” he said.

Related

______________________________________________________

Got something to to say? Email fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published online, email fastmoney@cnbc.com.

Trader disclosure: On Dec. 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Grasso owns AKS; Grasso owns AMR; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns BAC; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Najarian is long AAPL; Najarian is long C; Najarian is long JPM calls; Najarian is long WFC calls; Najarian is long INTC; Najarian is long; HOO; Najarian is long GE; Najarian is long COP; Najarian is long MC calls; Terranova is long EMC; Terranova is long SU; Terranova is long NCR; Terranova is long UPC; Terranova is long TRLG; Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long AXP; Terranova is long IBM; Terranova is long HES; Terranova is long CAT; Terranova is long SWN; Terranova is long CNI; Terranova is long DECK; Terranova is long SBUX; Finerman owns SPY; Finerman has short calls AAPl; Finerman owns BAC; Finerman has short calls JPM; Finerman’s firm owns SPY; Finerman’s firm owns IWM; Finerman’s firm owns MDY; Finerman’s firm owns JPM; Finerman’s firm is long IBM and has short calls;

Steve Grasso
Stuart Frankel & Co. and its partners own CSCO

Stuart Frankel & Co. and its partners own CUBA

Stuart Frankel & Co. and its partners own GERN

Stuart Frankel & Co. and its partners own GM

Stuart Frankel & Co. and its partners own HPQ

Stuart Frankel & Co. and its partners own HSP

Stuart Frankel & Co. and its partners own HSPO

Stuart Frankel & Co. and its partners own JPM

Stuart Frankel & Co. and its partners own MET

Stuart Frankel & Co. and its partners own MSFT

Stuart Frankel & Co. and its partners own MU

Stuart Frankel & Co. and its partners own NYX

Stuart Frankel & Co. and its partners own PRST

Stuart Frankel & Co. and its partners own RDC

Stuart Frankel & Co. and its partners own UAL

Stuart Frankel & Co. and its partners own WFT

Stuart Frankel & Co. and its partners own XRX

Brian Kelly
Shelter Harbor Capital is long EURO

Shelter Harbor Capital is long IWM

Shelter Harbor Capital is long LNG

Shelter Harbor Capital is long PLPT

Shelter Harbor Capital is long CORN

Shelter Harbor Capital is long SOY

Shelter Harbor Capital is long AUSSIE $

Shelter Harbor Capital is long CANADIAN DOLLAR

Mike Khouw
Cantor Fitzgerald is a market maker in securities of AAPL

Cantor Fitzgerald is a market maker in securities of AKS

Cantor Fitzgerald is a market maker in securities of BAC

Cantor Fitzgerald is a market maker in securities of C

Cantor Fitzgerald is a market maker in securities of PNC

Cantor Fitzgerald is a market maker in securities of GS

Cantor Fitzgerald is a market maker in securities of JPM

Cantor Fitzgerald is a market maker in securities of WFC

Cantor Fitzgerald is a market maker in securities of GDX

Cantor Fitzgerald is a market maker in securities of MS

Cantor Fitzgerald is a market maker in securities of NFLX

Cantor Fitzgerald is a market maker in securities of GLD

Cantor Fitzgerald is a market maker in securities of XLU

Cantor Fitzgerald is a market maker in securities of TLT

Cantor Fitzgerald is a market maker in securities of XLF

Cantor Fitzgerald is a market maker in securities of SMH

Cantor Fitzgerald is a market maker in securities of INTC

Cantor Fitzgerald is a market maker in securities of CSCO

Cantor Fitzgerald is a market maker in securities of YHOO

Cantor Fitzgerald is a market maker in securities of IBM

Cantor Fitzgerald is a market maker in securities of CDR

Cantor Fitzgerald is a market maker in securities of AMZN

Cantor Fitzgerald is a market maker in securities of CMC

Cantor Fitzgerald is a market maker in securities of VZ

Cantor Fitzgerald is a market maker in securities of FIO

Cantor Fitzgerald is a market maker in securities of TOL

Cantor Fitzgerald is a market maker in securities of VMC

Cantor Fitzgerald is a market maker in securities of GE

Tim Freeman
Elevation LLC trades SPX options

Mike Walkley
No disclosures

Andy Hargreaves
Neither Andy, nor his family own shares of NFLX

Pacific Crest does not own > 1% shares of NFLX

Pacific Crest has no investment banking relationship with NFLX

Pacific Crest does make a market in the shares of NFLX

Steven Winoker
The following companies (GENERAL ELECTRIC GE) are or during the past twelve (12) months were clients of Bernstein, which provided non-investment banking securities related services and received compensation for such services GE / General Electric Co.

An affiliate of Bernstein received compensation for non-investment banking-securities related services from the following companies GE /General Electric Co.

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report

  • Bill Nygren, Oakmark Fund, explains why Apache, Bank of America and Google will be winners in 2015.

  • Nick Tiller, Sustainable America founder and chairman, tells CNBC's Kate Kelly oil prices are poised for a tradable rally. Tiller likes the Brent ETF and energy sector.

  • Discussing interesting trends contributing to the market's rally into year's end, with the FMHR trader Josh Brown and Dan Greenhaus, BTIG.