Natural Gas Services Group, Inc. (NYSE:NGS)

Right now, the ratio of oil price to natural gas price is at a relative high, and will likely fall given the various advantages of natural gas as a fuel coupled with increased de-hedging of natural gas production starting in 2012. This company, which fundamentally is fairly strong, should benefit from rising natural gas prices.

Selling just above its 52-week low. Small float. $12 of book value/share. Very little debt.

Producer of compressor equipment used in natural gas production/extraction. Very healthy operating margin, cash reserves exceed total debt, and LFCF/share price is above 10%. Given the strong and rising demand for natural gas, looks like NGS will be a solid bet to outperform a sideways moving market over the next several years.

buying on a dip.....

Natural gas is the fuel of the future, IMHO.

Natural gas is the next best alternative to oil. And service companies are not affected that much by price fluctuations as drillers.

Gas is always needed and if oil increases in price there could be a switch to natural gas.

Major natural gas equipment supplier for XTO and the enhancement of production in tight gas shale.

Consistent long term growth.

Natural Gas Services is a play on the fact that over the next several years more natural gas production in the United States will come from unconventional wells. Unconventional natural gas deposits, shale gas as an example, is formed along with the geological formation that it is enclosed in and is held in the formation by pressure from the outside. When it is released from this formation, ie drilling, it does not have the pressure to push the natural gas to the wellhead. It requires compression services to help it out of the well and on to the processing facilities. Also, not all wells are the same and even a single well will change over time. Given this, unconventional wells need compression very early in production and throughout the well life and most often needs to be at the individual wellhead. Natural Gas Services provides these small to medium purpose built compressors. Its larger competitors focus mainly on large compressors that push the natural gas along pipelines after it is produced from the well. Also, the industry trend in recent years has been to outsource the compression services to companies that have a wide range of equipment and the expertise to apply the equipment correctly to get maximum production from the wells.

NGS has managed impressive growth over the past few years and should continue for several years. It has the necessary capital to build its rental fleet currently and should within a year or two be able to self fund it's capital requirements.

Risks to this company include the dependence on a few major customers which include XTO Energy which has been been on a buying spree lately of natural gas properties and the fact that it's rental compressor terms are short and any slow down in gas production would impact the company very quickly. It mainly competes with small shops but does have competitors that are large in size and have greater financial resources than NGS.

Bullish on natural gas

Nat gss is undervalued on a BTU basis and is clean. Lots of upside both for the producers and the drillers and piplines.

Nat. gas hasn't caught oil yet!

NGS will outperform over the next year or so due to the increase in oil per barrel and a growing interest in alternative fuels. As oil becomes more of a high priced commodity alternative energy resources will become norm allowing this company to grow and expand.

Tools for natural gas industry

GAS!!!!

Natural gas will be all the rage as oil prices relentlessly rise.

GAS GAS GAS

PEOPLE ARE LOOKING TO SAVE SO THEY ARE GOING NATURAL RESOURCE

17.000