GTLS AND GLNG
by Anonymous Questions | June 5, 2012 11:31 am
Hi Travis, you recently wrote a tremendous Friday File[1] titled ”Checking in on Natural Gas”. While I am researching the long term potential of this industry I have 2 questions for you if you have the time.
1.) At what purchase price would GTLS interest you as a long term value investment?
2.) Has the negative report on GLNG by Pandoras Box Research influenced your thoughts on the Company?
Endnotes:
- Friday File: https://www.stockgumshoe.com/tag/friday-file/
Source URL: https://www.stockgumshoe.com/2012/06/microblog-gtls-and-glng/
HI — On GTLS, I haven’t done any more in-depth research but it’s now approaching a reasonable value if the analysts aren’t being too optimistic. They’re expecting big growth next year (30%ish or more earnings growth), and it’s trading at 15X next year’s earnings. I have an alert set to ping me if it gets down well into the $50s and forces me to pay closer attention, but I haven’t had time to dig into this one much more than that yet.
On GLNG, I don’t think there was anything new or particularly frightening in the new reports — they are heavily levered, they are aggressive, they use their MLP to offload assets so they can expand even more aggressively, this is all stuff we know about Golar as well as about pretty much all John Fredriksen companies. If you think natural gas and floating liquefaction/regasification facilities are going to be in high demand, Golar is at least as levered to that trend as anyone and will not be shy about betting the company on the trend … if you want a safer bet on just natural gas tankers, there are a few reasonable stocks to consider as well, most of which I’ve mentioned over the last year or so (Teekay’s LNG shipping MLP and Gaslog are both a bit less aggressive, and I’d still take Teekay’s MLP over Golar’s MLP), though I haven’t looked closely at those in the last couple weeks.