On Tuesday’s episode of Mad Money, Jim Cramer weighed in on the recent rally in the natural gas sector and highlighted several companies that, in his view, are well-positioned to benefit from the current environment.
“Alright, lately, we’ve seen this really major rebound in the price of natural gas. It’s up roughly 27% from its lows in under three weeks.”
READ ALSO: 13 Stocks on Jim Cramer’s Radar Recently and 10 Jim Cramer Stocks with Huge Upside Potential.
Cramer said that prices have essentially returned to the levels seen in early January, before concerns over the administration’s now mostly reversed tariff agenda disrupted the market. He explained that the rebound is largely in line with what he expected following President Donald Trump’s election. He contrasted natural gas with oil and noted that Trump’s “drill, baby, drill” mantra would have led to increased drilling, which typically drives oil prices down, but natural gas operates under very different constraints.
He emphasized that natural gas is heavily influenced by federal policy, especially when it comes to exports. According to Cramer, global demand for American natural gas is strong, but meeting that demand requires liquefied natural gas terminals, which cannot be built without regulatory approval. He mentioned that the Biden administration took a less favorable stance on fossil fuel development, while Trump has shown a willingness to approve new pipelines and LNG export infrastructure.
“So here’s the bottom line: In this exciting sector with the natural gas trade coming alive again, I like EQT for production, ONEOK and Enbridge for pipelines and distribution, and the OG Cheniere Energy as a pure play on liquified natural gas exports. I think they very much work here with a fossil-friendly White House.”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 13. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Commented on These 6 Natural Gas Players
6. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 70
Cramer called Cheniere Energy, Inc. (NYSE:LNG) the “LNG OG” and said:
“So let’s keep it simple and let’s stick with the LNG OG, and that’s Cheniere Energy, which became the first legitimate LNG exporter nearly a decade ago. We’ve been with it the whole way, and it remains the largest exporter of liquefied natural gas in America. The stock’s up more than 8% year to date after fully recouping all of its post-Liberation Day losses. Cheniere has many growth projects, and I think it can keep building on its lead in this space, which is why I like the stock.”
Cheniere Energy (NYSE:LNG) is a well-known name in the liquefied natural gas sector, and the company concentrates on owning and operating LNG terminals across the United States. TimesSquare Capital Management stated the following regarding Cheniere Energy, Inc. (NYSE:LNG) in its Q4 2024 investor letter:
“We often see the ebb and flow of the Energy sector tied to underlying commodity prices. In this area, we seek low-cost exploration & production companies with high-yielding acreage or specialized service providers. Cheniere Energy, Inc. (NYSE:LNG), an operator of liquefied natural gas terminals in New Orleans and Corpus Christi, gushed by 20%. Solid third quarter results included a beat to profit projections and increased forward guidance. Higher production and optimization efforts were drivers of the upside. We added to the position as our conviction level increased.”
5. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 34
While Cramer acknowledged that he liked Sempra (NYSE:SRE) previously, he expressed that it has been a disappointment.
“Sempra, diversified energy company that we used to like very much for its LNG business, has also become a bit of a disappointment. The LNG business is fine, but the regulated gas utilities in California is struggling.”
Sempra (NYSE:SRE) is an energy company that provides electric and natural gas services. It manages electricity transmission, handles distribution, and focuses on building energy infrastructure. It is worth noting that on March 7, Cramer said:
“Well, tell you the truth… they did not do a good job. It was a bad quarter. It is very upsetting to me. I’ve spoken to Jeff Martin several times as CEO, but there were several things that were definite misses. It does deserve to trade lower. It yields almost 4%. I still can’t tell you to buy. We have to see another quarter because it was that jarring. I wish I didn’t have to say that, but Sempra did not deliver. That’s just plain and simple.”
