I’ll be traveling this weekend, so I’m getting your Friday File out to you a bit early this week — I want to take a look at a couple of developments in the “Gumshoe Universe” of stocks and see if I want to change my mind about any of these companies. I also have a new stock to add to the watchlist — it just went public earlier this year and I’m not ready to invest in it yet, but I want to keep an eye on them, and I have a couple comments on some of our other watchlist stocks that I’ve been monitoring.
First, one of the speculative stocks that I own but have waffled about a bit over the past year — Golar LNG (GLNG). What’s up with Golar?
Golar LNG is a stock I bought and suggested to the Irregulars almost exactly two years ago — this is what I said about them back in January:
“Golar is probably the most aggressive and creative of the Liquefied Natural Gas shippers — they own a fleet of LNG tankers, as well as floating processing units (old tankers that have been retrofitted to serve as floating regasification units, turning LNG back into “dry” gas and feeding it right into land gas pipelines), and they’re even talking up the possibility of flexible, floating liquefaction units to serve the relatively small gas projects or offshore projects that might not justify a capital-intensive liquefaction plant (or to serve those wells during the years it takes to build a plant). Golar is a John Fredriksen company, one in a long string of aggressive firms that see a long-term trend (double-hulled tankers for Frontline, Deepwater rigs for Seadrill, etc.) and invest in it even as the crowd is worried about overcapacity. Like other Fredriksen companies, too, it uses “alternative” financing, including a captive MLP (Golar Partners, GMLP) to help make sure that investors can get solid cash dividends even from capital-intensive projects. LNG is a story that everyone knows know, and it is possible that the fleet is being overbuilt with the orders that have been placed and the increased number of tankers on the spot market (like Golar’s), but I think we’re still early in this game and that the LNG shippers will be in surprisingly high demand. The near-term risk is that over the next few years the ...