Cheniere Energy leads 5 LNG stocks near buy points

Your stocks to watch for the coming week are LNG stocks Chen energy (LNG), Flex LNG (FLNG), Golar LNG (GLNG), New fortress energy (NFE) and Excel Energy (EE).


With the market in a confirmed uptrend and waiting to see if the Federal Reserve will hike rates by 75 basis points in the coming week, these five LNG stocks are worth keeping an eye on for investors investing in the want to expand the energy sector.

Global energy prices have been volatile in forecasts over the past few weeks amid recession fears and a possible destruction of oil and gas demand. Since Russia invaded Ukraine earlier this year, both US crude oil and natural gas futures have hit highs and then declined before recovering this week.

Meanwhile, Europe has been busy finding alternative sources of energy to replace Russia to fill up its gas storage facilities for the winter. Europe’s stores hit around 94% capacity this week, causing spot prices in Amsterdam to turn negative as LNG tankers waited outside European ports.

In 2021, Russia provided almost half of the European Union’s gas imports. So far in 2022, more than 70% of total U.S. LNG shipments have gone to Europe, according to federal data, compared to 34% in 2021.

The US is the world’s largest natural gas producer and is preparing to bring more LNG shipping capacity online as the Freeport LNG export facility is scheduled to start operating again in November.

While Europe’s gas storage facilities are currently near full, cold weather this winter could keep demand high and make LNG stockpiles with shipping assets essential.

Demand for LNG in Europe and Asia is likely to remain strong.

LNG stocks: Cheniere Energy Stock

LNG shares rose 0.2% to 174.48 during Friday trading. On the week, the stock fell 0.75%. According to MarketSmith analysis, shares have recaptured the 10-week moving average and formed a cup and handle pattern with a buy point of 178.69. The buying range is from 160.30 to 176.33.

Houston-based Cheniere Energy is the largest producer of liquefied natural gas in the United States and one of the largest LNG operators in the world. The services range from gas procurement and transport to ship charter and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.

The UK government has recently confirmed that it is in talks with a number of companies including Cheniere for an LNG purchase agreement.

In the first half of 2021, less than 40% of Cheniere’s LNG cargoes ended up in Europe. That rose to over 70% in the second quarter of this year, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortages has intensified over the past month. Back then, an explosion shut down the Nord Stream 1 pipeline from Russia, which once supplied 40% of the European Union’s natural gas.

In the second quarter, revenue rose 165% to $8 billion and LNG earned $2.90 per share versus a net loss of $1.30 per share in Q2 2021.

The company will report third-quarter earnings on Nov. 3, with analysts expecting earnings to rise to $5.55 per share from a loss of $4.27 a year ago. According to FactSet, sales are expected to increase 141% to $7.7 billion.

LNG stocks have a composite rating of 82. They have a relative strength rating of 97, an IBD Stock Checkup exclusive gauge of stock price movements with a score from 1 to 99. The rating shows how a stock’s performance has been over the past 52 weeks versus all other stocks claimed in the IBD database. The EPS rating is 41.

LNG stocks are on the IBD leaderboard.

Flex LNG storage

Flex LNG shares were down 4.8% on Friday at 30.80. On the week, FLNG was up 2 cents at 30.80.

According to MarketSmith, shares are in consolidation with an official buy point at 37.09. FLNG had struggled above the 50-day moving average on Tuesday, hitting 34.56 on the day, but then fell back for the rest of the week.

The Bermuda-based LNG transporter and processor focuses on LNG transportation with its fleet of LNG carriers and Floating Storage Regasification Units (FSRUs). The company operates thirteen LNG tankers.

FSRUs offer additional flexibility compared to traditional land-based gas terminals. In addition to transporting LNG, these vessels have the ability to vaporize the LNG onboard and deliver natural gas through offshore and nearshore receiving facilities.

With a spate of LNG tankers being forced to wait to unload at ports as European infrastructure can’t handle increasing LNG shipments, companies with FSRU capabilities could gain popularity.

In the second quarter, Flex LNG missed the prospect, with earnings per share rising 110% to 61 cents a share and revenue rising 29% to $84.2 million. FLNG will report third quarter earnings on November 15th. The Street is forecasting a 28% increase in earnings to 77 cents a share. Revenue is expected to increase 12% to $91.4 million.

LNG stock Flex LNG ranks fourth in the Oil & Gas Transportation/Pipeline industry group. FLNG has a composite rating of 97. Its relative strength rating is 93 and it has an EPS rating of 98.

Golar LNG

GLNG shares rose 0.4% to 27.24 on Friday. On the week, the stock is up 6.4% as it formed a cup base with a buy point of 30.76. Since late September, GLNG has been trading below its 50-day moving average, but rallied 6.4% amid high volume on Tuesday to reclaim that support. On Friday, GLNG stock found support at the 50-day moving average. It’s possible that Golar’s LNG shares will start to forge a grip, which would offer lower entry.

Golar LNG owns and operates marine LNG infrastructure and develops floating LNG liquefaction terminals and FSRU projects based on the conversion of existing traditional LNG carriers.

The company reports third-quarter results on November 16. Wall Street is forecasting earnings per share of 31 cents, up from a loss of 84 cents a year ago. Revenue is expected to fall 33% to $71.2 million.

Golar LNG, based in Hamilton, Bermuda, reported in August that it earned 29 cents per share in the second quarter, a steep jump from a loss of 17 cents per share in the second quarter of 2021, according to FactSet. Total revenue declined 16% to $86.1 million in the second quarter.

GLNG reported first-quarter financial results that came in well below analysts’ expectations. The global LNG shipping company announced a loss of 35 cents a share on revenue of $79.7 million.

LNG stock GLNG has a composite rating of 93 out of 99. It has a relative strength rating of 98. The EPS rating is 79.

New Fortress Energy stock

NFE shares fell 3 cents to 54.53 on Friday and are up 7.5% for the week. The stock has a cup pattern with a buy point at 63.16, although a handle would be nice to see. Shares have been in a steady uptrend since New Fortress Energy hit recent lows of 42.12 on Oct. 13. NFE stock recaptured the 50-day moving average on Tuesday and added to gains on Wednesday.

The New York-based liquefied natural gas company was founded in 2014 and has operations in the United States, the Caribbean, Europe and Latin America. NFE works on the energy infrastructure and develops, finances and operates natural gas plants.

NFE reports third-quarter earnings on Nov. 8, with analysts expecting earnings to rise to 75 cents a share from a loss of 5 cents in the third quarter of 2021. Revenue is expected to rise 202% to 569 million US dollar rise.

New Fortress Energy reported a net loss of 81 cents a share and revenue soared 120% to $497 million in the second quarter. New Fortress Energy has also announced a partnership with power adapter (PLUG) for a 120-megawatt industrial hydrogen plant near Beaumont, Texas. The facility would be one of the largest green hydrogen facilities in North America.

Green hydrogen is the name given to hydrogen produced using renewable electricity as an energy source. According to the World Economic Forum, hydrogen is considered a key fuel for the global energy transition.

LNG stock NFE has a composite rating of 93. Its relative strength rating is 98 and its EPS rating is 26.

LNG Stocks: Outperforming Energy Stocks

EE shares rose 0.9% to 26.70 on Friday. For the week, Excelerate Energy shares were up 4.6%, trading above the 50-day moving average. EE stocks formed a cup pattern with a buy point of 28.88. This mug base sits next to a failed mug with handle base and a failed IPO base.

The stock is up 25% since hitting recent lows on Oct. 11.

Excelerate Energy, which was founded in 2003, went public in April 2022. The stock’s IPO price was $24. Based in Woodlands, Texas, the company is a leading operator of FSRUs. The company provides FSRU infrastructure development and has 12 offices around the world.

In the second quarter, EE missed earnings forecasts. The company reported a net loss of 8 cents a share on revenue of $623 million. The company reports third-quarter results on Nov. 9, with The Street expecting earnings per share of 21 cents and revenue of $492 million, according to FactSet.

On Tuesday, Germany signed a five-year deal with Excelerate Energy to charter the company’s FSRU to deliver LNG. The agreement begins in the first quarter of 2023.

LNG stock EE ranks fourth in the Utility-Gas Distribution industry group. Excelerate Energy has a composite rating of 74. Its relative strength rating is 88. Its EPS rating is 45.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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