CNBC’s Jim Cramer on Friday advised investors to buy shares in Excelerate Energy while it’s a steal.
“The stock is a bit cheaper than Cheniere Energy, which is the king of LNG exports here in the US, at least when judging by last year’s earnings before interest, tax, depreciation and amortization.… Valuation seems reasonable to me. ” said the “Mad Money” host.
“If you’re looking for a way to participate in the emergence of liquefied natural gas, which you should, I think Excelerate Energy is a great way to play it, especially now that the stock has retreated from its heights,” he added.
Shares of Excelerate Energy rose 2.02% on Friday, but reached a new 52-week low earlier in the day.
Cramer said he likes the company because it’s an LNG game at a time when “the rest of the world is desperate to import liquefied natural gas from the United States.” He also highlighted the company’s solid finances.
Excelerate has fantastic margins. Their EBITDA margin came in at 29.5% last year – I think the EBITDA margin is the right one to see because it’s a very capital intensive business, so it’s important to back the financial hit , they get from off-paper depreciation of their floating LNG terminals, “he said, also mentioning the company’s profitability.
However, Cramer also highlighted some disadvantages of the company, including that it is a controlled company with founder George Kaiser holding 77% of the vote.
Excelerate is also not a direct bet on U.S. liquefied natural gas exports, Cramer added.
“But as more and more countries enter into agreements to buy U.S. natural gas, they will need infrastructure to unload those shipments. And this is where Excelerate comes in,” he said.
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