As Part I of this article relayed, insiders at alternative-energy firms just aren't showing an imminent need to buy into their firms' shares, despite the dire global-warming consequences that their companies' products are supposedly ready to address.

While I admit my own bias that global warming is still a discussion, not a lecture, I can't speak to solar and wind insiders' motives for not being more bullish on their own firms at this point. More pointedly, I don't care what their motives may be. Long before Enron, I learned that it is better to look at what executives do than to listen to what they say.

I'll admit point-blank, however, that there is a recent precedent for insiders failing to actively buy into a hot industry. The time was the late 1990s, and the firms were those hot dot-coms. The reason for the lack of buying back then was that the Internet execs tended to have such whopping great options awards that they didn't have to buy their shares on the open market to benefit grandly from their soaring stocks. But I don't see the same uniform high ownership via options in the alternative-energy stocks for which I can see Form 4 data.

Considering that most alternate-energy firms require government incentives to make their products economically feasible, I don't blame them for holding on to their wallets now. Who knows when politicians will finally decide what the rules of engagement for combating global warming may be? Until the rules are set, there is unwelcome added risk to betting big on alternative-energy firms.

That logic is lost on those who take it on faith that the threat of manmade global warming will become so obvious, so soon, that now is the time to buy into all things solar. But given the experience of investors in the dot-com bubble in the late 1990s, who is to say that this won't turn out to be a profitable strategy for an equal number of years?

Just as I did better than most in the late '90s by investing with insiders who were outside the dot-com bubble, I expect to beat the market by following insiders into the energy-related stocks that they already believe are decent enough values, despite the potential for future government dictates to disrupt their industries. And at this time, that means natural-gas stocks.

Collecting Fossils

Six of the longs now on the Recommended List of my


newsletter have their fortunes tied largely or completely to the future of natural gas. These are:

I've written about most of these positions in past


columns and won't go into the specifics of each stock's insider profile. But they are leaning bullish.

Kinder Morgan, Enterprise and Oneok are midstream master limited partnerships (MLPs) that store and transport natural gas, oil and the related liquids via their network of pipelines. Hugoton, McMoRan and SandRidge are (or in Hugoton's case, related to) upstream exploration and production (E&P) firms.

The success of the midstream plays relates more to the volumes of liquids they store and transport. The success of the upstream plays relies more on the actual price of natural gas, since it affects the underlying value of their reserves and dictates whether or not new drilling activity is economically worthwhile. The important factors for all these energy plays rely on increased economic activity.

This last point would seem to make my energy plays bets on an economic recovery, not on global-warming issues. But I would argue that all energy-related investments are now affected by global-warming considerations. After all, the legislation that would logically follow any wholesale embrace of global warming as a dire threat to man's existence would be truly awesome and affect the economics of energy firms, both traditional and alternative.

Of course, so would the lack of any such legislation. But since the odds have increased that we will see some sort of mandate that affects the energy industry because of global-warming concerns, I argue again that this issue has already infused itself into the calculus of all potential energy plays.

What insiders appear to be relaying with their lack of buying in alternate-energy plays and their rather more bullish stances in selected traditional names is that executives as a group don't expect any strong fossil-fuel-damning, alternate-energy-championing legislation to be promulgated in response to global warming concerns in the near future. Again, I'm not concerned if this stems from insiders' own dismissal of global-warming concerns. I'm just calling it as I see it in insiders' own trading activity.

A further interpretation of insiders' trades seems to be that the prospects for natural gas are relatively better than those for coal. Insiders at coal plays such as

TheStreet Recommends


( ICO) and

Natural Resource Partners

(NRO) - Get Report

haven't been shy with their insider trades in the past. But I see no strong opinions from coal insiders now, even though most of their stocks have traded up with the market.

I should also point out that the bullishness from the six natural-gas plays I've listed above doesn't appear to be part of a sudden, uniformly positive sentiment in the natural-gas industry. My over-weighted position in the industry has been built from purchases made from as long as several years ago (Kinder Morgan) to as recently as several days ago (SandRidge). There is hardly a move on by all natural gas execs to jump into their shares.

That fact seems to rule out the ideal situation for natural gas, which is to be recognized and incentivized in any future energy legislation as the logical bridge fuel to power more items (including vehicles) in order to reduce greenhouse gases (not to mention our dependence on foreign oil) while farther-flung alternative-energy solutions are being developed. If this industry's Washington lobbyists had any whiff of such a bold move, I would expect to see massive insider buying across the natural-gas space.

But I don't. So the best interpretation I can come up with to explain why insiders have pointed me into natural gas is that they feel -- more so than coal insiders -- that whatever laws do end up leaving the congressional sausage mill are at least less likely to totally screw up the economics of their businesses.

That could end up being the best outcome any executives can expect from global-warming legislation. This same sentiment could be why insiders at

Weatherford International

(WFT) - Get Report

recently took advantage of a dip in their firm's shares to add to their positions. Weatherford is a global oilfield service company with over 70% of its revenues derived outside of the U.S. Its officers obviously don't expect oil demand to be legislated away anytime soon.

Such a drastic action would be a double-edged sword for

Shaw Group


, another company that insiders recently bought into. This international engineering and construction firm does a fair business building and maintaining oil and gas infrastructure. But Shaw also has large exposure to nuclear energy, which is widely regarded as a necessity if the world is to reduce greenhouse gases. And Shaw also stands ready to help make the world's electricity grids smarter and make coal burn cleaner by implementing carbon capture and sequestration.

None of the above stocks are going to make it into the many green-oriented mutual funds and ETFs that have sprouted up in recent years. But they are the way insiders and I are playing global-warming concerns right now.

At the time of publication, Moreland was long Kinder Morgan, Enterprise Products, Oneok Partners, Hugoton Royalty Trust, McMoRan Exploration, SandRidge Energy, Weatherford International and Shaw Group, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, Moreland appreciates your feedback;

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