If you’re looking to play America’s new found bounty of nat gas, strategic investor Dennis Gartman says only two stocks will do.
Cheniere
“If you’re going to play nat gas equities, this is the place to play,” says Gartman on CNBC's Fast Money. Cheniere is the first company to win approval to export natural gas from the continental U.S.
“And although nat gas prices are two dollars and change here, they’re well over $16 in parts of Asia,” he says. “They have the permits to move it – and they have the plants to do it,” he says.
Chesapeake
Despite Chesapeake's woes, “Don’t discount how smart Aubrey (McClendon) is,” says Gartman.
“He made some mistakes but his company remains dominant in the game."
Earlier this year, the SEC opened an informal inquiry into Chesapeake's program that granted Chief Executive Aubrey McClendon a share in each of the natural gas producer's wells. Unsure how events would play out, investors ran for the exits.
"If you look at the chart, you see that the stock has stopped going down," Gartman adds. "They know what they’re doing – the worst is over."
Gartman isn't the only Chesapeake bull we've heard from recently. Billionaire investor Carl Icahn told CNBC the same thing back on July 2nd.
“Aubrey (McClendon) is a very bright guy and he’s put a lot of great assets together,” said Icahn at the time.
“The problem was they gambled too much in buying them and they have a cash gap. Now, they have to cut expenses but I think they can.”
* And on a related note, if you’re wondering how high nat gas might go as the hotter than expected summer drives demand Gartman tells us, “I suspect it can go up to $4 or even $4.50.” However he says it won’t march a lot higher than that.
“It can't. There’s a huge amount of nat gas being discovered in the Marcellus Shale and Eagle Ford – we have a lot of it.”
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Trader disclosure: On July 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long VLO; Steve Grasso is long XLU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long M; Karen Finerman is long MA; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FCX CALLS; Pete Najarian is long TJX CALLS; Pete Najarian is long KEY CALLS; Pete Najarian is long XOM CALLS; Scott Nations is long BAC; Scott Nations is long JPM
For Jamie Townsend
Nothing to Disclose
For Amelia Bourdeau
Nothing to Disclose
For Dennis Gartman
Dennis Gartman is long NatGas
For Nicholas Debenedictis
Nothing to Disclose
For Joe Weisenthal
Pending
For John Williams
The U.S. equity strategist, a member of his team, or one of their household members has a long common stock position in WU
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: V
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: WU
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided.: V
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: MA
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: V
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided.: WU
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: MA
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: V
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: WU
CNBC.com with wires.