2. Chart Industries, Inc. (NYSE:GTLS)
Forward P/E Ratio: 11.09
Earnings Growth This Year: 79.10%
Number of Hedge Fund Holders: 47
Short % of Shares Outstanding: 15.84%
Chart Industries, Inc. (NYSE:GTLS) is a leading manufacturer of equipment for industrial gas, energy, and biomedical industries. Simply speaking, it develops equipment and technologies for handling gasses and liquids, with a prime focus on clean energy solutions.
Its major product segments include Cryo Tank Solutions, which manufactures storage and distribution for industrial gasses and hydrocarbons, Heat Transfer Systems, which are designed for separating, liquefying, and purifying gasses, and Specialty Products.
Chart Industries, Inc. (NYSE:GTLS) is on the path to achieving its medium-term financial targets that include sales growth in the mid-teens, mid-30 % gross margin, and adjusted diluted EPS growth CAGR of mid-40 %. Its total orders for the second quarter grew 12.1% year-over-year to reach $1,164.7 million. The quarter came in with a series of record results including sales improving 18.8% year-over-year to reach a record high of $1,040.3. Moreover, the company also improved its backlog by approximately 13% indicating its improved prospects for the upcoming quarters.
Chart Industries, Inc. (NYSE:GTLS) was held by 47 institutional investors in Q2 2024, with total stakes worth $725.9 million. D E Shaw is the top shareholder of the company with a position worth $181.3 million. Moreover, its cheap valuation makes it affordable at current levels. GTLS is trading at a 42% discount to its sector and its earnings are expected to grow by more than 79% during the year to reach $10.91.
Although the company has a high short interest rate of 15.84% as a percentage of outstanding shares and is one of the worst affordable stocks to buy right now, here’s a different perspective:
With the climate change debate on the rise and the trend of electrification across various industries, the demand for a hydrogen-fueled economy is on the rise. The United States government has awarded a $7 billion funding for several regional hydrogen hubs during the last year. Hydrogen has the potential to electrify heavy industry and that too with zero-carbon.
Why is this detail necessary? Because Chart Industries, Inc. (NYSE:GTLS) is one of the companies feeding the hydrogen economy through its equipment. In the long run as the demand for hydrogen fuel increases, it will bring the demand for the company’s products higher with it.
Heartland Value Fund stated the following regarding Chart Industries, Inc. (NYSE:GTLS) in its first quarter 2024 investor letter:
“We continue to focus on taking what the market gives us while waiting for fat pitches to come our way. This quarter, for instance, we started a new position in Chart Industries, Inc. (NYSE:GTLS). We’ve been monitoring the stock for years and finally saw the buying opportunity we’ve been waiting for. As the leading producer of equipment for the shipment of liquefied natural gas (LNG), Chart Industries sold off sharply on the Biden Administration’s decree to pause new export permits.
We view the pause as a short-term political action in anticipation of the coming election. In any case, GTLS has robust backlogs for the next several years. And if the U.S. truly slows, Chart, an international provider, should benefit as the rest of the world accelerates LNG development…” (Click here to read the full text)
