LIPPER AWARDS: Hennessy manager says NatGas distribution companies on the upswing
Friday, March 21, 2014 - 03:19
Mar 21 - Skip Aylesworth, manager of the Hennessy Gas Utility Index Fund says that unlimited supply of natural gas and low pricing will benefit the distribution companies and their stocks
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Today on what strategies -- -- eyes get elsewhere it manager of the let our award winning had a thing gas utility index -- welcome and congratulations. Well thank you very much you're very kind we sit out this -- -- new track the American gas association stock index. -- usually are not the place you want to be in the overall stock market soaring as it did in 2013. It different and this. The strategy of yours. Work wiley and when he thirteen. I'm very fortunate. The purpose of this spot and it is is primarily. To invest in the distribution side of the natural gas industry. And that part of the industry has just had a marvelous 345 years in terms. Turn around as a fundamental industry. The companies involved in the industry have done wow they're stocks have done well and hence. Let's talk about commodity pricing for a moment Nat gas prices really spiked early in the year they've come backed out since that. What's the outlook for gas prices this year and how does that -- impact some of these stocks. Well -- really we should talk a little bit about the gas industry in general natural gas business is really divided into two main components. Exploration and production most of the people who drill for natural gas and then the distribution side of the business. That's the part where people worry about getting -- once it's found to ultimately the end user. So in terms of this price. From a historical standpoint you know yes you're correct that early part of the year. There -- -- spikes too close to six dollars eight million BTU that's kind of the unit of measure million BTU. The historic price has has been in the 1012 they're low teen range. And then what's this discovery new technologies fracking and horizontal drilling. We have uncovered a lot of natural gas within our political control here in North America. I wanna get to this point about what the pricing will do for the stocks historically we know those prices have come out. But Europe. Seem to be -- -- they'll stay at those lower levels how exactly to support the stocks of the distributions. On the distribution side it's all about volume metrics and the man. So as long as we have this the basic investment thesis is unlimited supply should keep the price a reasonably. Historically low and fairly stable so this unlimited supply. Predictable pricing. Should lead to increased demand. For the product which will throw come through the distribution system so that's all positive. Four. These stocks and these companies and hence we hope for the fun. Certainly interesting to watch that energy space at its impact skip Ellsworth thanks so much for your time. It's my pleasure thank you very much. I'm Rhonda -- this this writers.
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