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.”
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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.”
4. Venture Global, Inc. (NYSE:VG)
Number of Hedge Fund Holders: N/A
Cramer highlighted Venture Global, Inc. (NYSE:VG) as one of the LNG exporters whose stocks have declined, as he said:
“Finally, we want some exposure to the companies leading the way in the liquified natural gas export space, but many of the LNG exporters have proven to be very tricky stocks. One of the biggest up-and-comers, for instance, in the space, Venture Global, came public in January. It’s become a comedy of errors. Even after stabilizing, recovering a bit over the past month or so, the stock sits at 10 bucks and change, that’s down at least 66% from its 25% IPO price.”
Venture Global (NYSE:VG) builds and runs natural gas liquefaction and export sites near the Gulf Coast in Louisiana. The company is involved in transporting natural gas, managing shipping, overseeing regasification, and selling LNG. On April 23, when Cramer was asked about the stock, he commented, “You got to tell him not to get near Venture Global… It’d just be vicious if he owns that stock.”
3. Enbridge Inc. (NYSE:ENB)
Number of Hedge Fund Holders: 27
Enbridge Inc. (NYSE:ENB) was mentioned during the episode, and here’s what Cramer had to say:
“What else? You know I’m a big fan of Enbridge, the Canadian pipeline colossus. Although their network also has lots of crude oil exposure, still, I think Enbridge belongs in any shortlist of natural gas plays because they operate the continent’s largest natural gas utility by volume. These guys were always big in Canada, they run the main gas utility in Toronto.
But last year, they bought three American utilities in Utah, Ohio, and North Carolina, respectively, from Dominion Energy, and that’s created North America’s largest natural gas utility. Now, despite a solid 5% gain so far this year and a nearly 18% gain over the past 12 months, the stock’s pretty still cheap, trading just over 20 times this year’s earnings estimates, get this, supports a juicy 6% yield. What is not to like about Enbridge?”
Enbridge (NYSE:ENB) is an energy infrastructure company in North America. The company operates pipelines, natural gas systems, renewable power assets, and provides commodity marketing and logistics services.
2. ONEOK, Inc. (NYSE:OKE)
Number of Hedge Fund Holders: 47
Calling ONEOK, Inc. (NYSE:OKE) one of his “favorites”, Cramer said:
“I’d also love some natural gas pipeline exposure here in part because most of these pipeline stocks feature generous dividends. How about ONEOK?… It’s one of my favorites. This is a major player in nat-gas gathering, processing, storage, and transportation with a big nat-gas liquid system.
Now, ONEOK’s still down almost 14% for the year, primarily because it got obliterated in the wake of the Liberation Day tariff announcement, with only a modest recovery since then. The most recent quarter was also less than ideal, a revenue beat paired with an earnings miss and light cash flow numbers. Still, ONEOK offers a unique value proposition if you believe in a major natural gas comeback.
Plus, even with the softer first quarter results, management reaffirmed its full year forecast. That’s a real sign of confidence to me. Down here, the stock sells for less than 16 times this year’s earnings estimates. It’s got a 4.8% yield, backed by tons of cash flow. ONEOK, it’s a buy.”
ONEOK, Inc. (NYSE:OKE) operates across the United States in the natural gas and natural gas liquids sector. The company handles gathering, processing, fractionation, storage, transportation, and marketing.
1. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 88
Discussing the rally in natural gas stocks, Cramer started with EQT Corporation (NYSE:EQT) as he said:
“So now that we’re no longer terrified that high tariffs will throw the economy into recession, how do we play this relentless rebound in natural gas? Well, first, probably most obvious, frankly if you watch the show, I like EQT, that’s the Pittsburgh, Pennsylvania-based operation. That’s the only large-scale integrated natural gas producer in the United States so far.
This stock’s up an astounding almost 22% for the year. It’s trouncing the rest of the group. About three weeks ago, on the exact day that natural gas prices set their low for the year, we spoke to the company CEO, Toby Rice, and he explained that EQT’s secret sauce is their ability to generate consistent cash flow growth even when the commodity’s going in the wrong direction thanks to the low cost structure. Since then, this stock’s up a quick 15% as natural gas started moving in the right direction.”
EQT (NYSE:EQT) is a major natural gas producer in the United States. The company focuses on extracting and selling natural gas and natural gas liquids.
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