Vanguard Natural Resources, LLC (VNR), Chesapeake Energy Corporation (CHK): Key Traits of a Great Retirement Investment

Page 1 of 2

How will you spend your golden years? Photo credit: Author

Retirement is probably the one concept I think least about. I have at least three decades until I’ll be even close to retirement age. Even when I reach it, like most Americans, I’ll probably continue to work in at least some capacity. That being said, the key to being in the position to choose what I’ll be doing in my golden years are the decisions I make today.

That’s why I’m always on the lookout for great stocks that I can hold on to for the long-term. While these exact companies might not stay in my portfolio for the next thirty years, the foundation upon which they are built is strong enough to last a lifetime. One company with a foundation built to endure is Vanguard Natural Resources, LLC (NASDAQ:VNR). There is actually a great lesson to be learned by taking a closer look at the foundation Vanguard is building by reviewing the five key strategies (link opens a PDF) that drive its business.

High quality, low risk asset portfolio
Vanguard Natural Resources, LLC (NASDAQ:VNR)’s business model is to buy up known oil and gas reserves that will produce strong cash flow for years to come. It’s usually not shopping in the clearance isle, nor is it looking to pay a premium for the choicest of assets. Instead, it’s in the Warren Buffett mode of buying great assets at fair prices. So, while Vanguard Natural Resources, LLC (NASDAQ:VNR) might be buying an oil well, the same can be said for any asset an investor buys, quality over quantity will go a long way to ensuring retirement bliss.

Disciplined acquisition strategy
Far too often companies grow for the sake of growth. The American natural gas industry led by Chesapeake Energy Corporation (NYSE:CHK) has for years outspent its cash flow in order to grow its production. That was working when natural gas prices where high, but when prices crashed all the debt the company racked up forced it to sell assets just to pay its bills. Only more recently has Chesapeake Energy Corporation (NYSE:CHK) become more disciplined and has decided to live within its cash flow. Vanguard on the other hand has remained disciplined, while it reviews nearly 150 deals each year, it might only close on two of them. Bottom line, invest in a company that’s disciplined in how it spends money.

Active hedging program
Another facet of Vanguard Natural Resources, LLC (NASDAQ:VNR)’s business model is to lock in its cash flow several years into the future. While it might not earn as much if prices spike, it also won’t lose its shirt if prices collapse. The company takes a long-term view, something few companies or investors do today. Managing for the future is the first step toward ensuring that there actually will be a future for the company, so look for companies that are looking out over the long-term.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!