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Released on Saturday, October 15, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - If you like natural gas and oil, but cannot afford to buy it on the commodity market, there are several options that you can exploit. For example, you could buy stock in a driller, refinery, or distribution company and have a portion of the profits reflected in the appreciation of your stock price and or dividends. You could also invest into an ETC specifically holding a prospectus of oil and natural gas futures, stock options, longs and shorts on oil and natural gas firms.
Or you could invest in a market trust, such as Energy Corporation of America’s Marcellus Trust I (NYSE:ECT). The trust is formed in Delaware, and is chiefly allocated to make gains from ECA’s holdings in Green County, Pennsylvania.
The trusts outstanding shares are trading for $27.11 per share (4:00 PM EST, October 14th, 2011), and the entire trust runs a total market capitalization around $465 million, making it a small cap. trust. But it is important to remember that this trust is backed by the ECA, a privately held and largely believed to be financially stable company.
Because of the business structure of the trust, it has next to no operating costs, thus causing a surplus profit and operating margin, in a sense, what comes in should be directly reflected in the share price of the stock, reduced by the dividends. Of course this is provided that speculation on the trusts value doesn’t cause large market fluctuations.
Some key stock statistics to keep in mind with ECT: it has an annual dividend yield of 10%, a 52-week change of a roughly 19% gain, and stock analyst have placed a high-target of the price at $36.00 a share with a mean target of $32.00 a share.
Right now oil demands are decreasing, but they are most likely to increase in the future when the world comes out of the current, or doesn’t enter another, recession, however, that gives ECA a bit of time to further develop operations in Green County, which would indicate increased valuation of the stock in the future; a company to look into trusting that hedge that you have been looking to place.
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