Oil’s Drop Creates This Winner

Private Gathering We've invited experts to show you how to live a richer, freer and more-sovereign life. We have fewer than 20 seats left. Click here to reserve your seat. The Pipeline to Profits By Chad Shoop, Editor of Pure Income The oil and gas sector has taken a beating during the past few months, with the CBOE Oil Index down approximately 19% from its September high, despite last week's attempt to bounce back. With the excess supply still in the market, oil is expected to remain weak during the near term. You would be forgiven if you believed there isn't a bright spot to be found among the oil and gas companies. Even though this sector may sound a bit risky for a short-term trade, there is one group that is poised to rally during the next three months, and I can show you how to take advantage of this hidden gem. An Urgent Warning to Anyone With Retirement Savings or Home Equity ... Buried deep on page 49 of the recent IMF report is a sinister plan for global wealth confiscation that will rob anybody with even "positive net worth." Governments around the world are now using this to plot their next move. They'll plunder retirement accounts and other assets. They'll act swiftly and without warning so people have no time to flee. To discover the steps you can take right now to protect yourself, just click here. Natural gas pipelines hold the best opportunity when the price of oil is tanking. Investors start to panic when they see a major commodity, such as oil, drop so far so fast. In fact, black gold is down about 50% since June. As a result, investors have sold anything even remotely related to oil. The link between the two is simple: If oil is cheap, demand for natural gas gets reduced. And if the energy world operated in a vacuum, then that relationship would very well be the case. But the fact is that natural gas is still a cheaper, cleaner alternative and in high demand. The link mentioned above doesn't account for contracts to supply a certain amount of natural gas that will likely keep demand at least stable into the later part of next year. A Bargain in Natural Gas I have uncovered several pipeline opportunities, but there is one that my Pure Income readers just locked in at a 19.5% gain — Spectra Energy Partners (NYSE: SEP). Spectra is one of the largest Master Limited Partnerships (MLPs) in the U.S., operating more than 17,000 miles of pipeline. It also owns interest in storage facilities for natural gas and crude oil. It is the largest transporter of natural gas to New England and the second largest to New York City. Indeed, it controls 12% of all gas consumed in North America. When I placed the trade back in September, it was hard to find a cheap MLP in the natural-gas business — but that was exactly the opportunity Spectra represented. The security was trading at just 11 times earnings, compared to an average of 25 times amongst its peers. The shares were a bargain because the sector is going through a correction, and Spectra was one of the high-fliers that investors had singled out for profit taking. So when investors decided to jump back into the pipeline plays, Spectra was going to be a favorite because it was so cheap. And that's exactly what happened. To take advantage of the rebound in Spectra, I sold a December $50-strike put option in September. All I needed was for the stock to close above $50 on the date of expiration, which was last Friday. Shares finished at $55, which was 10% above our strike price. As a result, subscribers who sold the December put collected 19.5% in income over just three months. Spectra is a stock that I will be returning to again and again. And it's a company you should be considering as well. A Steady Income Stream The company has proven over the long term that it is able to return increasing amounts of cash to shareholders. Spectra operates a string of natural-gas storage and transportation assets that generate a safe, stable stream of cash flow for the firm. Since Spectra went public in 2007, it has increased its dividend payment each and every year. And take a look at the projections for the next couple of years here in the graph: That's the type of dividend growth I like to see in a company. Spectra wrapped up its 28th consecutive quarter with an increase in its dividend. It has several open projects right now, and plans to expand its project book to $36 billion. The stock currently pays out a decent 4.2% dividend yield. I would follow these shares closely, and if you get a pullback below $53, I will be looking to sell puts against the stock — especially if it involves an oil-driven price drop. Regards, Chad Shoop Editor, Pure Income P.S. Knowing how to generate income is crucial in this low interest rate environment. The Fed is going to be even more hesitant to raise rates going forward when the biggest secret of the Obama administration is revealed. To learn how you can protect yourself from the turmoil that is coming, click here. Become a Subscriber When the next economic crisis hits — will you be prepared? As a subscriber to Jeff Opdyke's Sovereign Investor, we will arm you with the tools and strategies needed to prepare and prosper in the months ahead. Subscribe Now! Recent Articles A Real Estate Opportunity You Don't Want to Pass Up Whether you're looking for a second residence overseas or just a piece of international real estate to rent to rich Europeans, check out Knysna, South Africa. We Can't Predict the Future of Oil and Gas Prices Every year, the Energy Information Administration releases its predictions on the oil and gas market, but these predictions aren't always accurate. Additional Commentaries Fire up your body's own 'fountain of youth' Without cell death or free radical damage, your cells live longer, therefore helping to extend your life and protect you from illness and disease. Diane Feinstein and the real bad guys The Senate report's findings, reached without interviewing any of the CIA officers implicated, are rife with conclusions reached without factual bases.   Privacy Policy The Sovereign Investor Daily, 55 NE 5th Avenue, Suite 200, Delray Beach, FL 33483 As a Sovereign Investor Daily subscriber in good standing, you're eligible to receive our comprehensive guide full of life-changing financial secrets. You'll learn how to legally and easily escape high taxes, and protect your personal wealth. Just click here to claim your copy. The mailbox associated with this email address is not monitored, so please do not reply. 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