The big hedge funds continue to bet on the long-term natural gas story
SAC Capital is among the top holders of two stocks that are aligned with the long-term U.S. natural gas play: Heckmann ( HEK) and Cheniere Energy ( LNG). Even as natural gas prices test historic lows in the first quarter -- after they declined throughout the fourth quarter -- hedge fund managers are keeping their exposure to natural gas as a major component of the U.S. energy and economic story of the future. Heckmann is a water services company that works with the shale drillers to haul water to and from hydraulic fracturing sites. Heckmann has made a big bet on the conversion of exploration and production trucks to natural gas as a fuel source -- it's a way to cut down on the cost of E&P logistics by replacing diesel engines with natural gas-powered engines. Cheniere Energy is the only play on the natural gas export market story, having won the first federal government approval for an export terminal. T. Boone Pickens' BP Capital, which is front and center in the natural gas infrastructure story -- he is on the board of Clean Energy Fuels ( CLNE), which is building out the refueling station infrastructure for natural gas transportation -- in the fourth quarter added to this natural gas play from another perspective: shipping. One of his hedge funds top adds was Golar LNG ( GLNG), the only stock to play the international liquified natural gas shipping story. Both Cheniere and Golar hit new 52-week highs in the first quarter, as the long-term secular narrative about the importance of natural gas continued to bolster stock prices. George Soros has been a long-time holder of natural gas engine maker Westport Innovations ( CLNE). Simply put: this trade has continued to work, even if the future earnings power and potential size of markets for companies like Westport and Cheniere remains difficult to pin down.