Two Stocks To Buy As Natural Gas & Rare Earth Metals Bottom

Summary

  • Energy demand is growing again after a nearly flat decade.
  • Both LNG and cleaner energy will be in demand as data centers devour energy and the broader electrification of the economy happens.
  • Natural gas and rare earth metals are both near bottoms now.
  • We have a unique LNG company and America’s current monopolist in rare earths to buy now.
Periodic Table Element Praseodymium
davidf

The energy transition is happening due to billions of dollars being poured into it. No rhetoric can slow it down. And, contrary policy can’t slow it much either.

After a decade of below 1% annual growth, energy demand is surging again. This is mainly due to data centers involved with AI, but, a broader electrification of the economy is also underway.

I have talked recently about the demand for natural gas that is developing in the face of flattening oil production which means less affiliated natural gas. The recent trough in natural gas is already behind after the recent 20% increase in natural gas prices. Global natural gas demand is only going to grow through the 2030s.

Natural Gas Bottom
Natural Gas Bottom (Trading Economics)

Rare earth metals used in clean energy, EVs, technology and defense have primarily been processed in China for a couple decades. They just put some limitations on their exports. Two companies, one American, one Australian, stand to benefit as those supply chains pivot away from China.

China tightens its grip on rare earths and gives Africa an opportunity – The Sunday Guardian Live

China nationalizes rare earth resources · EMSNow

Rare Earths Bottoming
Rare Earths Bottoming (Bloomberg)

Buy New Fortress Energy (NFE)

I added to my position this week. As described in the option selling article, I sold cash-secured puts. I also am buying shares under $20 per share.

New Fortress of note just announced the sort of deal I discussed after I attended the Hart Energy SuperDug Oil & Gas Conference in Fort Worth in May. Gas and energy producers are teaming up to power data centers.

New Fortress Energy Announces Launch of Klondike Digital Infrastructure to Develop Data Center Solutions | New Fortress Energy

New Fortress Energy’s position globally is only going to expand. They have unique tech (Fast LNG platforms) are seeing growing demand and have deep pockets behind them.

I have them at a 1-2% position depending on account with puts sold as well to get to near a full position if assigned.

Buy MP Materials (MP)

I opened an MP position this week and also have puts sold per recent option selling article.

As the only U.S. miner and producer at the moment, they have a huge lead on mining and processing of rare earth metals. They already have big contracts with the likes of GM (GM). The company has a strong balance sheet and could be profitable this year.

The stock has had a Meme rally in the past and I expect it won’t be long before there’s another.

I have them at a 1-2% position depending on account with puts sold as well to get to near a full position if assigned.

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