Look for Spectra Energy to benefit from the next natural gas boom

Some institutional Investors have exited Spectra's shares recently on likely, continued soft natural gas prices through at least early-FY2010, but the argument here is that the pull-back is a good time to establish a position.

Further, assuming natural gas use and prices resume a more-constant uptrend as the U.S. economic recovery takes hold, SE will trade at a much higher multiple than the current P/E of 13.5. A $30 stock price in 2010 is very attainable. The First Call FY2009/FY2010 EPS estimates for SE are $1.13 to $1.40.

Stock Analysis: Spectra Energy Corp. is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in SE now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your SE position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $8.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.