10 Worst Performing Utility Stocks in 2024

1. New Fortress Energy (NASDAQ:NFE)  

YTD Performance as of October 15: -74.42%  

Market Cap as of October 15: $2.43 Billion  

Number of Hedge Fund Investors: 20  

New Fortress Energy (NASDAQ:NFE) is an energy infrastructure company that focuses on natural gas, particularly liquefied natural gas (LNG). The company’s mission is to deliver cleaner, affordable energy by building and operating LNG terminals and facilities in emerging markets.

New Fortress Energy (NASDAQ:NFE) has been facing challenges in addressing its near-term liquidity needs and debt maturities. However, the company has successfully navigated these difficulties by securing a deal with creditors to raise $400 million through an equity offering announced on October 1.

The equity offering, which offered 46,349,942 shares of Class A common stock at $8.63 per share has provided a crucial capital injection for the company. New Fortress Energy’s Chairman and CEO, Wes Edens, further expressed confidence in the company’s future by personally investing $50 million in the offering. Additionally, the company reached a transaction support agreement with certain noteholders, issuing $1.2 billion in new 12% 2029 senior secured notes and exchanging $1.4 billion worth of existing 2026 and 2029 notes into new 12% 2029 senior secured notes. This raised the company’s bond debt from $3.12 billion to $3.45 billion.

With this substantial increase in liquidity, the company is now in a better position to address delayed vendor payments and capital expenditures. The LNG production from its Fast LNG facility in Altamira, Mexico, is expected to generate significant cash flows, which will be essential for meeting the increased interest payment obligations. Although the company will need to manage the challenges posed by material shareholder dilution and higher interest payments, the resolution of near-term debt and liquidity concerns has removed a major overhang from the stock. Industry analysts have reached a consensus Buy rating for the stock, with an average target price of $19.07, indicating a potential upside of 68.30% from 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.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.