One Of The Best Ways To Profit From The Natural Gas Revolution
A big part of my job as managing editor of StreetAuthority involves talking with our premium newsletter experts to get a sense of what they like in the market, where they think it's headed and how they plan to help their followers profit.
That means I get paid to hear from some of the top investing minds in the country on a regular basis. What could be better?
I want to share some of that wisdom. I'm featuring insights and top picks from each of our experts over the next couple of weeks as a way of saying thanks for being a StreetAuthority.com reader.
Today's pick comes courtesy of Andy Obermueller, Chief Strategist of our Game-Changing Stocks newsletter.
Game-changing companies often take time to ferment (shares of Apple (Nasdaq: AAPL) muddled along in the single digits for most of the company's first 15 years). But Andy Obermueller's Game-Changing Stocks advisory has pointed readers to some big gainers already in 2013, including Acadia Pharmaceuticals (Nasdaq: ACAD) , which has risen 55.9% since Andy wrote about it last April, and Mazor Robotics ( MZRTF ) , up 150.5% since Andy's report in mid-February. The stock below that Andy picked to beat the market through the rest of the year has already posted a gain of 47.3% since he originally wrote about it on April 30, and he believes that's just the start.
Here's more from Andy:
A Cheap Green Fuel is Helping This Niche Manufacturer Grow Rapidly
The fuel of the future is likely natural gas. Right now, it's almost seen as a byproduct of fracking shale for crude. This huge supply has pushed prices to a low that's seen as the new normal, and one big question is what to do with all of it.
Look for that to change as political leaders get behind the only "clean" energy in the oil patch. It's also the only one that can be 100% domestically sourced in the United States -- and even exported.
Right now, this development is playing out it in two spaces -- on road and off -- and I've picked winners in both. The pick I'm keeping the closest watch on is a company that makes niche engines for off-highway use. This is a dizzying array of specialty vehicles, up to and including the Zamboni at the ice-skating rink. If it doesn't go the speed limit and might have to be used indoors, it's not a bad bet that Power Solutions International (Nasdaq: PSIX) built the engine. Its current output is roughly 40,000 units a year -- and growing fast. Right now the appeal of these engines is primarily their green footprint: Some 69% of PSI's sales are for emissions-compliant equipment.
But let's also not forget cost. Natural gas costs only a fraction of the price of gasoline or diesel fuel, which makes it appealing for wider transportation uses. Why pay $120 to fill up the Escalade when $60 would do the trick -- and deliver the same amount of horsepower?
That's what's driving the nation's truck stops and gas stations to put in natural gas-dispensing pumps. These are being installed at a frenetic pace, and about the time that it's possible to drive cross-country on natural gas, PSI will be entering the lucrative passenger-car on-highway market. (There it will face some completion: You can order, today, a Ford F-150 or a Volvo station wagon with a natural gas engine.) So this isn't a development that's merely on the horizon -- this trend is already in the making.
What we are talking about here is a plentiful fuel with a green footprint that's cheap and available in our own backyard. You couldn't write a nicer script for America's energy future, and the companies like PSIX that leverage that trend are likely to help write a happy ending for a lot of our portfolios, too.
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