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June 4, 2009 Stock Pick: Crosstex Energy, Inc. (XTXI)

Stock Price: $3.76

Crosstex Energy is a midstream natural gas company headquarted in Dallas, operating approximately 5,700 miles of pipeline, 12 processing plants, four fractionators, and approximately 190 natural gas amine-treating plants and dew-point control plants. Crosstex currently provides services for 4.0 billion cubic feet per day of natural gas, or approximately eight percent of marketed U.S. daily production.

XTXI is a major player in the natural gas space. We believe natural gas prices are significantly too low right now and a major rebound in natural gas prices could be due. We believe XTXI could be positvely impacted by a rise in natural gas prices. An increase in drilling activity would also be positive for XTXI.

Overall, XTXI looks well positioned to take advantage of a turnaround in the natural gas market and the economy. XTXI discusses their prospects in detail in their first quarter report.

XTXI is trading at market cap of only around $175 million. In early May, XTXI jumped from the $2 level to nearly $5.00. XTXI has since corrected and it now appears very attractive at its current level as it quietly has begun to move higher again.

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