Financial analysts from Value Investor’s Edge have christened NASDAQ-listed Golar LNG as the “stock of the decade” as global LNG trade surges, led by Asian demand.
LNG is in extremely high demand in Asia, with forward prices hitting the $12s for November and $13s in January, compared to US prices at $3.
“This,” Value Investor’s Edge stated in a report posted on Seeking Alpha on Wednesday, “is leading to the strongest arbitrage opportunity we’ve ever seen in shipping. Unsurprisingly, LNG spot rates are soaring. Last week’s quote was $90k/day, up from $40k last year.”
This week, Golar reported the tri-fuel diesel electric (TFDE) market was $100,000 a day. These are the strongest levels since 2014.
“Demand is set to easily outpace supply growth (new ships) until at least 2021,” Value Investor’s Edge predicted, suggesting rates could climb to as high as $150,000 a day.
Golar LNG has 13 LNG ships on spot, including 10 modern TFDE carriers.
“Q3 and Q4 earnings set for a massive blowout. Target: $40/sh, 52% upside,” Value Investor’s Edge claimed.
