Analyzing Cheniere Energy’s Recent Stock Performance

Cheniere Energy (LNG) stock has been volatile since the beginning of the year. The stock saw a new YTD (year-to-date) low of $51.2 at the beginning of March. Since then, Cheniere Energy stock has recovered 4.3%. The stock is still trading 9.7% lower than its 2018 highs. So far, Cheniere Energy has risen 0.6% in 2018. Despite the recent sluggishness, Cheniere Energy continues to outperform the Alerian MLP ETF (AMLP) and the Energy Select Sector SPDR ETF (XLE). AMLP and XLE have lost 6.5% and 7.0% YTD.

Cheniere Energy’s recent weakness, despite its strong 4Q17 earnings, could be due to reports about the company shutting down two storage tanks at Sabine Pass due to leakage. However, Cheniere Energy doesn’t expect the shutdown to impact its LNG exports. Tensions due to trade war speculations could be a concern for investors.

Cheniere Energy has gained 14.4% in the past year. At the same time, Cheniere Energy Partners (CQP) has lost 3.8%, while Cheniere Energy Partners LP Holdings (CQH) has gained 19.2%. Cheniere Energy owns the general partner and limited partnership interest in Cheniere Energy Partners through Cheniere Energy Partners LP Holdings. Cheniere Energy Partners’ underperformance compared to Cheniere Energy and Cheniere Energy Partners LP Holdings could be due to its complex structure.

Cheniere Energy has outperformed AMLP and XLE by more than 3,600 basis points and 2,000 basis points, respectively, in the past year. Cheniere Energy’s outperformance relative to XLE could be due to its strong cash flow growth protected by long-term fee-based SPAs (sales and purchase agreements) amid volatility in commodity prices and the timely completion of LNG Trains. Recently, Cheniere Energy entered into SPAs with Trafigura and China National Petroleum mainly for Train 3 at Corpus Christi.

Next, we’ll discuss global LNG markets’ recent updates. We’ll also discuss Cheniere Energy’s technical indicators and price forecast. Later in the series, we’ll focus on Cheniere Energy’s institutional ownership and analysts’ recommendations.