Why Natural Gas Services (NGS) Is A Compelling Investment Case

Palm Valley Capital recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 10.74% for the quarter, underperforming its benchmark, the S&P Small Cap 600 Index which returned 21.94% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Palm Valley Capital highlighted a few stocks and Natural Gas Services Group Inc (NYSE:NGS) is one of them. Natural Gas Services engages in the provision of small to medium horsepower compression equipment to the natural gas industry. Year-to-date, Natural Gas Services Group Inc (NYSE:NGS) stock lost 45.4% and on July 2nd it had a closing price of $6.54. Here is what Palm Valley Capital said:

“Unlike most energy companies, Natural Gas Services generated free cash flow and added to its cash position last quarter. We expect the company’s balance sheet to improve further based on our estimates of lower capital expenditures, rising lease revenues, and an upcoming tax refund. Natural Gas Services remains at a meaningful discount to our calculated valuation and, in our opinion, has one of the strongest balance sheets in the energy service industry.”

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In Q1 2020, the number of bullish hedge fund positions on Natural Gas Services Group Inc (NYSE:NGS) stock increased by about 11% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Natural Gas Services growth potential. Our calculations showed that Natural Gas Services Group Inc (NYSE:NGS) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.