CNBC’s Jim Cramer on Tuesday picked three liquefied natural gas stocks for investors to buy.
“Two of them are pure LNG export games – a bit trickier – and one is a more varied story, really perfect for home players worried about volatility,” said the Mad Money host.
Russia’s ongoing invasion of Ukraine has prompted the US to raise concerns about restricted supplies of commodities such as energy and food, and to impose economic sanctions on Russia. The US said in late March it will work with global partners to ship at least 15 billion cubic meters more liquefied natural gas to Europe this year in a bid to reduce dependence on Russian imports.
May natural gas futures were up 6.55% on Tuesday to around $6.10.
Here’s Cramer’s list of three LNG stocks he thinks investors should keep an eye on, beginning with his favorite:
Sempra Energy is “Not strictly a game, but has a nice LNG export business,” Cramer said.
“I like it long-term as it’s the best growth utility out there with a great LNG kicker. … If you’re looking for ways to meet Europe’s demand for LNG, I like Sempra Energy best,” he said, adding that the business is “steady” and the stock is still cheap relative to the company’s earnings.
Cramer also discussed two other LNG stocks he thinks might be investable: Cheniere Energy and Tellurian.
“It’s the safest pure play in the industry. … Analysts expect Cheniere’s revenue and earnings to peak this year. If you think the LNG business can stay strong beyond 2022 then you have my blessing to buy this but otherwise it is possible. The good news is already baked in and we suddenly find ourselves in a not-great stock market,” said Cramer.
“Given that the stock has essentially doubled since the end of last year, I think you can afford to be patient here. Just wait for a better entry point,” Cramer said.
Join the CNBC Investing Club now to follow Jim Cramer’s every move in the market.
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Questions, comments, suggestions about the Mad Money website? [email protected]