CNBC’s Jim Cramer on Friday advised investors to buy shares of Excelerate Energy while it’s a bargain.
“The stock is a bit cheaper than Cheniere Energy, the king of LNG exports here in the US, at least when judged by last year’s earnings before interest, taxes, depreciation and amortization. … The rating seems reasonable to me,” said the “Mad Money” moderator.
“If you’re looking for a way to participate in the rise of LNG, which you should, I think Excelerate Energy is a great way to play it, especially now that the stock has pulled back from its highs,” he added added.
Excelerate Energy shares were up 2.02% on Friday but hit a fresh 52-week low earlier in the day.
Cramer said he likes the company because it’s an LNG game in an era where “The rest of the world is desperate to import liquefied natural gas from the United States.” He also highlighted the company’s solid financials.
“Excelerate has excellent margins. Their EBITDA margin was 29.5% last year – I think the EBITDA margin is spot on because it’s a very capital intensive business so it’s important to recoup the financial damage they suffer from the start – paper depreciation of their floating LNG terminals,” he said, also mentioning the company’s profitability.
However, Cramer also highlighted some downsides of the company, including that it is a controlled company, with founder George Kaiser holding 77% of the voting rights.
Excelerate also does not play a direct role in US liquefied natural gas exports, Cramer added.
“However, as more countries strike deals to buy American natural gas, they need infrastructure to offload those supplies. And that’s where Excelerate comes in,” he said.
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