1. New Fortress Energy (NASDAQ:NFE)
5-Year Revenue CAGR: 78.65%
No of Hedge Fund Investors: 20
New Fortress Energy (NASDAQ:NFE) is a global energy infrastructure company that focuses on natural gas, particularly liquefied natural gas (LNG). The company aims to provide cleaner, affordable energy by constructing and operating LNG terminals and facilities in various emerging markets.
New Fortress Energy (NASDAQ:NFE) is facing significant challenges in addressing its near-term debt maturities and liquidity needs. However, the company has successfully navigated these hurdles and announced a deal with creditors to raise $400 million in gross proceeds in an equity offering on October 1.
The equity offering, which priced 46,349,942 shares of Class A common stock at $8.63 per share, has provided a much-needed injection of capital for the company. New Fortress Energy’s (NASDAQ:NFE) Chairman and CEO, Wes Edens, has demonstrated his confidence in the company’s prospects by investing $50 million in the offering. The transaction support agreement with certain supporting noteholders has also helped to address the company’s debt maturities, with the issuance of $1.2 billion in new 12% 2029 senior secured notes and the exchange of $1.4 billion in existing 2026 and 2029 notes into new 12% 2029 senior secured notes. This has resulted in a significant increase in the company’s bond debt from $3.12 billion to $3.45 billion but has also provided the company with the necessary liquidity to redeem $875 million of 2025 senior secured notes.
With a substantial increase in liquidity, the company is now well-placed to catch up on delayed vendor payments and capital expenditures. The commercial LNG production at the company’s new Fast LNG facility offshore Altamira, Mexico, is expected to generate significant cash flows, which will be crucial in servicing the increased interest payment obligations. While the company will need to navigate the challenges of material common shareholder dilution and increased interest payments, the successful addressing of near-term debt maturities and liquidity needs has removed a significant overhang from the stock.
New Fortress Energy (NASDAQ:NFE) is now better positioned to navigate the challenges of the energy market and capitalize on growth opportunities. Industry analysts have reached a consensus on the stock’s Buy rating, with an average target price of $19.07 that suggests a 68.30% upside potential from its current levels.
While we acknowledge the potential of New Fortress Energy (NASDAQ:NFE) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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