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With the energy sector turning negative for the year, and nat gas dropping below $2 for the first time in a decade, do you need to seriously reposition your portfolio?Don’t panic. The Fast Money traders have some ideas.
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Karen Finerman recommends long CF Industries. “Nat gas is a big input cost for CF Industries,” she says. “In 2011 it was around 45%. It was huge.” And in addition, she says ‘it’s a good story. So to have this additional benefit, it makes me like the name even more. I think there’s very meaningful upside.”
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Steve Grasso recommends watching Alpha Natural and Walter Industries.“Both of those names are large producers of met coal. And met coal is harder to substitute for nat gas. Also people in this space feel as if met coal prices are in the process of bottoming,” he says.
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Tim Seymour is a buyer of Freeport McMoran.“A lot of people have knocked down this stock for different reasons, but I think it looks interesting, here. The impact from the earthquake in Indonesia was overdone on this stock. I’d buy the dip.”
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