I think I've mentioned Natural Gas Services here before. This is a company I've followed for some time and looks like it might merit closer attention right about now.

From their website http://www.ngsgi.com

Headquartered in Midland, Texas, Natural Gas Services Group, Inc. sells and leases compressors used in the production of natural gas. We are a leading provider of small to medium horsepower compression equipment. We focus primarily on the non-conventional natural gas production business in the United States (such as coalbed methane, gas shales and tight gas), which, according to data from the Energy Information Administration, is the single largest and fastest growing segment of U.S. gas production.

You can read the rest by following the link above.

What interests me about this company is that they meet all my criteria for a low risk play with leverage to any increase in NG prices. NG has been dragging the bottom of it's price range for some time now, a fact reflected in NGS's share price. Lately there's been a bit of an uptick in NG, but I wouldn't characterize it as a breakout - it's probably not - but at some point prices will move up and NGS has good leverage to that.

They've been public since 2003, have a market cap of 217M with 12.22 MM S/O, so it's a small company with about 80% of the float in institutional hands. What interests me though, if you pull up a 10 year chart on their website and compare it to their industry index, you'll see they've never dipped below it, and have exceeded it by a wide margin on three separate occasions. With the sector starting to move a bit, there's every reason to expect that same kind of performance when we do eventually break out.

When that happens is anyone's guess, but the stock appears to have bottomed, so the downside is relatively well protected. This is the kind of lazy don't worry too much stock I look for in my general portfolio. I know I'm not going to wake up one morning and find it's gone down 50%, but when it does move, I'm going to outperform the sector, if not the broader index.

Also worth mentioning is the nice cup & handle formation going back to 2009, in fact if you look at the handle, you'll see a mini-cup & handle embedded in it. Volume's picked up slightly over the last year - nothing to write home about, but it's there, so there is some accumulation going on. All their operations are in the US, so Canadians have currency risk here, but I'd say that's relatively minimal. The US dollar looks like it's going to bottom here, at least for the term we're interested in, which is somewhere in the 1-2 year range for a possible double.

Not going to blow the lights out with this one, but you can park it, come back later, and it will still be there. I don't own it yet, but I'll probably start nibbling in the next week or so. I like to be early to these things as you often get faked out on the first run, and I really hate sitting on dead money, even if it's only for a few weeks.

ebear