By CNBC Jim Cramer Wednesday highlighted five companies involved in the liquefied natural gas industry that he believes could be worthwhile long-term investments.
When markets are challenging, investors should look to capitalize on capital by building positions “in companies exposed to strong long-term themes, like the rise of LNG,” said the host. program “Mad Money” said. “I think this is going to be one of the best stories of the next decade, no matter what the Fed is doing right now or [Russian president Vladimir Putin] are making that problem. “
Cheniere, a pioneer in the LNG industry, is “on track to earn $8.62 per share this year, [with] That number is expected to grow to $16 by 2023,” Cramer said. Of course, the company’s stock has had a big run, up 59% so far, but if you believe Cheniere can hit the estimate, the stock is still pretty bad cheap, trading only 10 times next year’s figure. But some of that is because this is temporary, and analysts expect earnings to return to around $12 in the following years, though it’s still pretty cheap by that figure. “
“Tellurian is not expected to begin shipping liquefied natural gas until 2026, but it finally began construction of its first facility in Louisiana earlier this year,” said Mr. Cramer. .
“This makes Tellurian inherently speculative, and they will likely have to do more than one fundraiser between now and 2026 to keep things on track,” Cramer said. However, he added, the longer Russia’s invasion of Ukraine drags on and disrupts European gas supplies, the more “realistic” Tellurian’s vision becomes.
Cramer noted in April he encouraged viewers to wait for a rally in Tellurian shares. At the time, it was trading around $6 per share. Now it’s at $4 per share, and Cramer said he thinks it’s worth buying here. He also noted that Cheniere co-founder Charif Souki is also the co-founder and executive chairman of Tellurian.
While Cheniere and Tellurian represent purer LNG companies, Sempra Energy is “a more diversified company with a liquefied natural gas exporter,” Cramer said.
“We had Sempra in the bullpen for Charity. … We were just waiting for a sale to buy this because they reported a great quarter,” Cramer said. own a gadget,” Cramer said.
Cramer noted that Excelerate Energy went public in mid-April and called the company “the rare recent IPO that I’ve been able to get behind.” The company “owns a fleet of ships that act as a floating LNG import facility. If you want to start importing this, Excelerate is the cheapest and fastest way to do it,” explains Cramer.
“The stock has had a good run of momentum right now, but in recent weeks it has been stymied, including a bad 8% drop just yesterday, possibly by the end of the day,” Cramer said. because European regulators started talking about imposing price controls on natural gas,” Cramer said. “However, Excelerate has already started doing deals with European countries that are in dire need of energy. Even before that, they had 223% revenue growth in the second quarter, but now you’re essentially doing it. get that quarter for free.”
However, Cramer cautioned that Excelerate is a bit more speculative, so it may be better for younger investors who can take on more risk.
“While the company is essentially a toll road operator for energy, it also has several irons for burning liquefied natural gas,” says Cramer. Just over a month ago, Enbridge announced a partnership with Pacific Energy to build an LNG export terminal in British Columbia. Plus, their pipeline network transports large amounts of gas to other people’s export terminals. The rise of this sub-sector is a great thing for their core business. It can take a long time to get started, but Enbridge is paying you to wait with that 6.3% yield. ”
