I don’t think it is a stretch to say that most of us that follow energy markets agree on one thing: The U.S. shale oil and gas business may be down at the moment, but it isn’t going away. You cannot stuff the genie back in the bottle, no matter how hard you try. Oil and gas are finite resources and, even though there is a movement towards alternatives, fossil fuels are still essential to developed economies. Now that the reserves held “tight” in shale are considered recoverable, they will be recovered.
The problem with that for investors, of course, is that it isn’t about to happen tomorrow. We can nibble at some stocks that look undervalued in the belief that, when the day comes, they will appreciate considerably, but tying up a lot of money in investments that could well be static at best for some time is not a smart thing to do. That is why when I read the words “free option for investors” in reference to a company’s frac sand business in a recent research report from a large Wall Street firm it piqued my interest.
The prospect of an investment that offers the possibility of a return without a recovery in the fracking business, while also positioning to benefit from that when it comes, is an enticing one. That is what Eagle Material Inc. (EXP) offers.
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Eagle Products is a Dallas, Texas based building products company. Their core business is, and has always been in aggregates…