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As the U.S. converts to natural gas, El Paso Corp. will be smiling

 May 14, 2008 01:15 PM UTC
Return Risk
+1.75% MID
Tracked Blogger
Symbol Sentiment Start Return Closed
EP Positive 05/14/08 -48.91% --

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Filed under: Commodities, Stocks to Buy

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, El Paso Corp. is worth a review.


El Paso Corp. (NYSE: EP) operates the largest natural gas transportation system in the United States, with a host of attractive, lateral business lines including natural gas production, gas storage, power generation, and trading.


El Paso is in a sweet spot, of sorts, concerning energy. Record-high oil prices -- plus the unknown regarding how high the price of oil will rise ($150?, $175?, $200?) -- means that a good number of businesses and residences will convert to natural gas, where possible, which, of course, benefits transmitters and producers of natural gas. The U.S has experienced two other periods with mass defections from oil to natural gas, during the two previous oil shocks, in 1973-74 and 1979-80.

Continue reading As the U.S. converts to natural gas, El Paso Corp. will be smiling

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