One Factor Bringing Cheniere Energy (LNG) Stock Up

NEW YORK (TheStreet) -- Shares of Cheniere Energy (LNG) were gaining 3.1% to $72.68 on heavy trading volume Tuesday after the oil and natural gas company cleared the last regulatory obstacle to expand its Sabine Pass liquefied natural gas export terminal.

The Federal Energy Regulatory Commission dismissed concerns from environmentalist group the Sierra Club raised after the agency granted Cheniere Energy approval for the expansion on April 6, according to the Houston Chronicle. The Sierra Group argued that the project would lead to an increase in natural gas production which would result in increased air pollution and higher gas prices.

In its order the FERC said it has no jurisdiction over the company's upstream natural gas production, and that it can't assume the project would lead to increased production.

About 4.3 million shares of Cheniere Energy were traded by 2:50 p.m. Tuesday, above the company's average trading volume of about 2.2 million shares a day.

TheStreet Ratings team rates CHENIERE ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHENIERE ENERGY INC (LNG) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 173.7% when compared to the same quarter one year ago, falling from -$97.81 million to -$267.71 million.
  • CHENIERE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CHENIERE ENERGY INC reported poor results of -$2.44 versus -$2.32 in the prior year. This year, the market expects an improvement in earnings (-$1.57 versus -$2.44).
  • In its most recent trading session, LNG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 45.17% is the gross profit margin for CHENIERE ENERGY INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LNG's net profit margin of -391.56% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to -$14.18 million or 22.16% when compared to the same quarter last year. In addition, CHENIERE ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -53.29%.
  • You can view the full analysis from the report here: LNG Ratings Report

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