3 Defensive Stocks To Buy in 2022 According to Seth Klarman

2. Archaea Energy Inc. (NYSE:LFG)

Percentage of Baupost Group’s 13F portfolio: 0.7%

Value of Baupost Group’s Stake: $65.48 million

Number of Hedge Fund Holders: 32

Archaea Energy Inc. (NYSE:LFG) is a Texas-based energy firm which deals in the production of renewable natural gas (RNG) by processing waste emissions from landfills.

Barclays analyst Theresa Chen initiated coverage of Archaea Energy Inc. (NYSE:LFG) with an ‘Overweight’ rating and a $26 price target on June 17. Archaea is a leading RNG company with long-term contracts that highlight its massive growth potential, according to Chen, who views the macro backdrop for RNG as being “highly constructive,” with demand set to double by 2030. She pointed out that Archaea Energy Inc. (NYSE:LFG) has a backlog of 88 top-notch RNG development projects for which gas rights agreements have already been signed, with 32.5 years of average remaining life. As of June 17, LFG stock has posted gains of 12.59% in the last 12 months, and 8% in the last month alone.

For the first quarter of 2022, Archaea Energy Inc. (NYSE:LFG) reported an EPS of $0.15, beating Street estimates by $0.09. However, quarterly revenue of $56.9 million fell below consensus estimates by $8.9 million.

With 3.12 million shares valued at around $65.5 million, Archaea Energy Inc. (NYSE:LFG) stock represented 0.7% of Seth Klarman’s first quarter portfolio. Overall, investors were eager on the unique energy company, with 32 hedge funds reporting bullish bets, as compared 26 hedge funds in the previous quarter.