In this article, we discuss the 10 LNG shipping stocks to buy now. If you want to read about some LNG shipping stocks, go directly to 5 LNG Shipping Stocks to Buy Now.
As energy transitions become the primary concerns of countries around the world, the role that liquified natural gas (LNG) could play in this regard is becoming more important and better understood. According to a report on the LNG outlook for 2022 by energy giant Shell, switching just 20% of coal-fired power in Asia to LNG would save the energy equivalent of all emissions from Germany. Similarly, in the transport sector, switching 10% of heavy goods vehicles and 10% of the shipping fleet to run on gas could potentially save energy equal to taking around 16 millions cars off the road.
As policymakers come to term with this idea, the LNG market is buzzing. In 2021, amid a broader price boom in the energy sector due to supply and demand issues, the global trade in LNG climbed to 380 million tons, an increase of around 6% compared to 2020. China, the manufacturing hub of the world, was the largest importer of LNG with 79 million tons imported during the year. US-led shale firms, meanwhile, were some of the biggest exporters of LNG as US LNG exports climbed by 24 million tons in 2021.
In 2022, the LNG market is expected to continue on a growth trajectory as it replaces dwindling domestic gas production in Asia, demand surges due to the Russian invasion of Ukraine in Europe, and increased efforts to decarbonize the LNG supply chain start to bear fruit. Some of the top LNG stocks to buy now in this context include Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), among others discussed in detail below.
Our Methodology
The companies that operate in the LNG shipping sector were selected for the list. The analyst ratings, business fundamentals, and growth catalysts of the stocks are also discussed to provide some additional context to readers.
Hedge fund sentiment was included as a classifier as well. Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.
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LNG Shipping Stocks to Buy Now
10. FLEX LNG Ltd. (NYSE:FLNG)
Number of Hedge Fund Holders: 2
FLEX LNG Ltd. (NYSE:FLNG) operates as an LNG transport firm. The company has beaten market estimates on earnings for the fourth quarter of 2021 and registered two consecutive years of dividend growth. On February 28, it declared a quarterly dividend of $0.75 per share, in line with previous. The stock has also benefited from the surge in demand for LNG carriers as the war in Ukraine results in disruption of Russian gas supplies, forcing European nations to look for alternatives from Qatar and other countries.
On April 1, FLEX LNG Ltd. (NYSE:FLNG) stock touched an all-time high after LNG giant Cheniere announced that it would be appointing a fifth FLEX carrier for a nearly four year time charter. The carriers of FLEX come with a cargo capacity of 173,000-174,000 cm.
At the end of the fourth quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $7.3 million in FLEX LNG Ltd. (NYSE:FLNG), compared to 3 in the previous quarter worth $7.7 million.
Just like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), FLEX LNG Ltd. (NYSE:FLNG) is one of the LNG stocks that institutional investors are monitoring amid rising energy prices.
9. TotalEnergies SE (NYSE:TTE)
Number of Hedge Fund Holders: 17
TotalEnergies SE (NYSE:TTE) is an integrated oil and gas firm. In an investor presentation on March 25, the company announced that it would be raising its annual capex target to around $16 billion from $15 billion for the 2023-2025 period. The CEO of the company, Patrick Pouyanne, said that some of this spending would come from clean energy projects while some would come from the extension of hydrocarbon fields in countries like Angola that had been put on hold due to the virus crisis.
On March 23, investment advisory Morgan Stanley maintained an Equal Weight rating on TotalEnergies SE (NYSE:TTE) stock with a price target of EUR 56, down from EUR 59 previously. Analyst Martijn Rats issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in TotalEnergies SE (NYSE:TTE) with 24 million shares worth more than $1.2 billion.
8. Golar LNG Limited (NASDAQ:GLNG)
Number of Hedge Fund Holders: 21
Golar LNG Limited (NASDAQ:GLNG) is an LNG transportation firm. On April 6, the company announced that it expected to raise around $250 million from the sale of nearly 6 million shares of New Fortress Energy and would use the net proceeds to deploy floating liquefied natural gas growth projects. Earlier in February, the company had posted earnings for the fourth quarter of 2021, reporting a revenue of $115 million, beating market estimates by $1.3 million. The net attributable income for the firm stood at around $6.8 million during the period.
On March 3, Bank of America analyst Ken Hoexter upgraded Golar LNG Limited (NASDAQ:GLNG) stock to Neutral from Underweight and raised the price target to $19.50 from $14, citing “commodity linked upside and momentum in floating LNG liquefaction” as one of the primary reasons behind the upgrade.
At the end of the fourth quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $365 million in Golar LNG Limited (NASDAQ:GLNG), up from 20 the preceding quarter worth $317 million.
In its Q3 2020 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Golar LNG Limited (NASDAQ:GLNG) was one of them. Here is what the fund said:
“At the end of August, Golar LNG’s subsidiary, Hygo Energy Transition (formerly Golar Power), announced its intention to go public through an IPO (sale of new shares issued with a capital raise). The aim of this move was to raise funds to finance its expansion in electricity generation and liquefied natural gas distribution. The valuation range released by Golar LNG Limited (NASDAQ:GLNG) for this subsidiary turned out to be significantly higher than our own valuation as well as the analyst estimates, which caused the stock to rally by 45% following the announcement.
However, on 23 September, an accusation against Eduardo Antonello, Hygo’s CEO, was made public. Specifically, he was accused of being involved in the incrimination of the oil drilling company Seadrill, where he worked until 2015, for bribes made in 2014. Following this announcement, Golar LNG’s share price plummeted by more than 30% in a single day and it was forced to suspend Hygo’s IPO, in addition to dismissing Antonello. Golar LNG Limited (NASDAQ:GLNG) claims that whatever happened to Antonello’s previous job position has no impact on Hygo. In our opinion, the tenders in Brazil conducted in recent years are especially transparent, with a computerized process, in which the submission of bids is done telematically. That said, an accusation of this nature is not good news for the company, whatever the result, since the reputational damage is high, takes some time to be repaired and may end up affecting the awarding of new contracts in this area. As of writing, Hygo’s valuation represents just over 25% of the value of the Golar LNG Limited (NASDAQ:GLNG).”
7. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 41
Shell plc (NYSE:SHEL) is an energy and petrochemical firm. On April 11, the firm announced that it had started shipping from a floating LNG facility off the coast of Australia after a major fire and subsequent power breakdown four months ago had disrupted supplies from the area. The firm has been allowed to resume operations from the area after assuring the concerned authorities that the facility can function safely without power. The resumption of operations could serve as a growth catalyst for the stock as LNG prices surge due to high demand from Europe.
On March 30, JPMorgan analyst Christyan Malek kept an Overweight rating on Shell plc (NYSE:SHEL) shares and raised the price target to GBP 2,700 from GBP 2,600, noting that an analysis of the gas business of the firm revealed a superior risk/reward for the stock.
At the end of the fourth quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in Shell plc (NYSE:SHEL), up from 33 in the previous quarter worth $2 billion.
In its Q3 2021 investor letter, Goehring & Rozencwajg Associates, an asset management firm, highlighted a few stocks and Shell plc (NYSE:SHEL) was one of them. Here is what the fund said:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Shell plc (NYSE:SHEL) must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell plc (NYSE:SHEL) spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell plc (NYSE:SHEL) pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what is has already promised, sell assets, and prioritize return of cash to shareholder which can be reallocated into low-carbon areas of the market.”
6. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 46
EQT Corporation (NYSE:EQT) is a natural gas production firm. On March 9, the firm proposed a plan to increase natural gas drilling in Appalachia and some US shale basins to improve the energy security of the United States and fight climate change at the same time. The proposal stressed that transitioning to such a system would have the “environmental impact equal to the electrification of every car in the US, the doubling of US wind capacity, and be equivalent to putting solar on the rooftop of every American home”.
On April 8, Mizuho analyst Vincent Lovaglio kept a Buy rating on EQT Corporation (NYSE:EQT) stock and raised the price target to $64 from $35, noting that US gas exports to Europe would need to be sustained for the long-term as the West decreased reliance on Russian energy.
At the end of the fourth quarter of 2021, 46 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in EQT Corporation (NYSE:EQT), compared to 57 the preceding quarter worth $838 million.
In addition to Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and ConocoPhillips (NYSE:COP), EQT Corporation (NYSE:EQT) is one of the LNG stocks in the spotlight amid the Russian invasion of Ukraine.
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Disclosure. None. 10 LNG Shipping Stocks to Buy Now is originally published on Insider Monkey.
