Friday, January 20, 2012
Japan was on a nuclear mission.
In the early 1970s, the country made it a national priority to increase usage of nuclear power. It started its nuclear program with two reactors. Some 40 years later, Japan has more than 50 main reactors, providing about 30% of the country's electricity.
By 2013, Japan wanted to increase its nuclear capacity for electricity to at least 40%.
This all changed in March 2011, when a major earthquake and tsunami caused a meltdown at Japan's Fukushima Daiichi nuclear plant. Nearly one year later, experts are still working to shut down radiation leakage at the site.
The nuclear disaster resulted in a complete shift in Japan's energy policy... and triggered a massive boom in a niche energy sector...
Japan has now shut down 80% of its nuclear capacity. In order to maintain electricity output, Japan is replacing nuclear energy with liquefied natural gas (LNG).
Japan has the third-largest economy in the world, based on gross domestic product. However, it does not have huge supplies of LNG. In the most recent quarter, Japan's LNG imports surged 12% from last year.
The country is now the largest importer of LNG in the world.
This huge demand has caused a spike in the price to ship LNG. That's great news for the LNG shipping industry – which has seen its "day rates" jump 50% in eight months.
Day rates are the amount of money charged per day for using a LNG vessel. In May, the average day rate for an LNG vessel was $90,000. Today, these rates have jumped to $140,000.
A big beneficiary of this trend is Golar LNG (NASDAQ: GLNG). With a fleet of 13 LNG vessels, it's one of the world's largest independent owners of LNG carriers. Since the disaster in March 2010, the stock is up over 120%, even after a sharp pullback this month.
Golar is not the only player in the industry. There are others offering high yields that have not seen a huge price spike like Golar.
There is a limited supply of LNG ships, and day rates are still climbing. So these LNG-play shippers have huge upside.
LNG shipping is a booming industry right now, with no signs of slowing. I wouldn't be surprised to see 50%-plus gains for most companies in the sector over the next six to 12 months.
"Pretty soon, every heavy-duty truck in the world will run on natural gas," Frank recently predicted. With companies like Waste Management, UPS, and Ryder adding natural gas engines, the biggest companies in the world are going "all-in" on the LNG boom. He shared two companies that would benefit greatly from this long-term uptrend... Shares are up 17% and 8% in just two months.
If you're looking to add a little natural gas to your portfolio, this one-click investment might sound like a good bet. But editor in chief Brian Hunt warns that these shares are "a contender for the world's worst investment."
Gold is quietly outperforming... "real money" hits a five-week high.
Copper jumps to a four-month high on signs that China's government will boost its economy.
Solar giant First Solar ignores market rally... shares are down more than 25% over the past three months, while the S&P 500 is up 8%.
Google sinks 5% over the past two weeks, while most other big techs are up.