CNBC’s Jim Cramer on Tuesday selected three liquefied natural gas stocks that investors should consider buying.
“Two are pure plays on liquefied natural gas exports, a bit more complicated, and then one is a more diversified story, really perfect for domestic players who are worried about volatility,” the “bad moneysaid the host.
Russia’s ongoing invasion of Ukraine has prompted the US to raise concerns about the restricted supply of basic goods, such as energy and food, as well as to implement economic sanctions against Russia. The United States said in late March that it will work with global partners to provide at least 15 billion cubic meters more of liquefied natural gas to Europe this year in a bid to decrease dependency on Russian imports.
US natural gas futures rose about 6% to a nine-week high on Tuesday.
Gas futures for the previous month rose 32.0 cents, or 5.6%, to settle at $6.032 per million British thermal units (mmBtu), their highest close since Jan. 27, Reuters reported.
Here’s Cramer’s list of three LNG stocks he thinks investors should consider, starting with his favorite:
Sempra Energy is “It’s not pure gambling, but it does have a good LNG export business,” Cramer said.
“I like it long-term as it is the fastest growing utility with an excellent LNG driver… If you are looking for ways to tap into European demand for LNG, I like Sempra Energy better,” said. he said, adding that business is “consistent” and his shares are still cheap relative to company earnings.
Cramer also discussed two other LNG stocks that he thinks could be investable: Cheniere Energy and Tellurian.
“It’s the safest pure play in the industry… Analysts expect Cheniere’s sales and profits 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’s possible the good news is out and all of a sudden we’re in a not-so-great stock market,” Cramer said.
“Given the stock has basically 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.
Register now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.