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Why Cheniere Energy is Outperforming the AMLP in 2017

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Cheniere Energy’s market performance

Cheniere Energy (LNG) had a decent first quarter in terms of stock performance. It has gained 10.8% since the beginning of 2017. Cheniere Energy is mainly involved in natural gas liquefaction and LNG (liquefied natural gas) exports. It became the first US company to export LNG from the lower 48 states in 2016. Cheniere Energy Partners (CQP), Cheniere Energy’s MLP subsidiary and owner of the Sabine Pass assets, has gained 11.3%.

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Cheniere Energy’s huge gains in 2017 could be due to the surge in LNG demand from the Asian and European markets, and the expected boost to LNG exports and energy infrastructure companies under the Trump administration. However, Cheniere Energy and its two subsidiaries, Cheniere Energy Partners LP Holdings (CQH) and Cheniere Energy Partners, are still trading below their levels before the rout in energy prices.

The Alerian MLP ETF (AMLP), which comprises 25 energy MLPs, has gained 0.2% YTD (year-to-date). Cheniere Energy’s outperformance of the AMLP could be attributed to its stable cash flow from contracted liquefaction trains amid uncertainty in the midstream sector due to crude oil and natural gas price volatility.

Series overview

In this series, we’ll look into Cheniere Energy’s operating performance, key performance indicators, and balance position. Following an analysis of Cheniere Energy’s financial statement, we’ll look at its valuation, technical indicators, and analyst ratings.

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