Pounce on a Pullback in This Top Nat Gas Play

by Sam Collins | April 24, 2014 1:13 am

Pounce on a Pullback in This Top Nat Gas Play

Spectra Energy (SE[1]) — This integrated natural gas holding company is a 2007 spin-off from Duke Energy (DUK[2]) and has been steadily growing sales and assets ever since. Along with its subsidiaries, Spectra currently transports about 12% of all natural gas in the U.S. and holds 7% of the nation’s storage capacity

It has consistently increased its dividend, up 37% in the past five years. It now stands at $1.34 per share for a current yield of 3.4%. S&P expects a further increase to $1.37 in 2014. On Feb. 4, the company reported Q4 earnings of $0.41 per share versus a consensus estimate of $0.38, and revenues beat estimates as well. Consensus earnings estimates for 2014 are $1.52 per share, and analysts expect $1.60 in 2015.

I last covered SE on Feb. 19[3], near $37, saying, “Just prior to the earnings report, the stock broke from an eight-month consolidation, which followed a breakaway gap in June. Accumulation has been above normal and MACD is in bullish territory. Buy SE for long-term participation in the growing natural gas industry and a trade to the mid-$40s.”

SE is still on my buy list, but since hitting a new high on Monday at $39.59 on below-average volume, it may pull back to its trendline and 50-day moving average at $37.38. Buy SE under $38 with a trading target of $45.

04 24 14 se 300x192 Pounce on a Pullback in This Top Nat Gas Play
Click to Enlarge

chart key 300x84 Pounce on a Pullback in This Top Nat Gas Play[4]

Endnotes:
  1. SE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SE
  2. DUK: http://studio-5.financialcontent.com/investplace/quote?Symbol=DUK
  3. on Feb. 19: http://investorplace.com/2014/02/trade-day-spectra-energy-se/
  4. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

Source URL: http://investorplace.com/2014/04/trade-day-spectra-energy-se-2/
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