Cheniere Energy, Inc. (LNG), Anadarko Petroleum Corporation (APC), And Three Ways to Ride the LNG Fired Rocket

Constructing LNG facilities

Chicago Bridge & Iron Company N.V. (NYSE:CBI) is one the leading engineering and construction companies around the world, which specializes in the development of natural gas projects. With the radical shift towards natural gas fired power plants and the rising demand for LNG in Asia, Chicago Bridge & Iron Company N.V. (NYSE:CBI) is one of the prime beneficiaries with a bright future.

Over the last five years, its net income has surged 946% while operating cash flow has risen 126%. The divergence in the growth of net income and operating cash flow can be explained by the 99% improvement in its gross margin over the last five years.

As a by-product of its robust growth, shares of Chicago Bridge & Iron Company N.V. (NYSE:CBI) have spiked 171% over the last five years, yet, its shares appear to be undervalued with a forward P/E of 10x. This is due to the fact that 2013-14 is expected to be an exceptional year for the company with an improving order book, and analysts estimate its annual EPS to grow by nearly 20% over the next year, and nearly 19% over the next five years.

Conclusion

LNG exports haven’t reached their saturation point yet as most of the projects are still under development. But, they involve a significant amount of risk and investors can create a portfolio of the above mentioned companies to hedge their risks and spread their rewards.

The article 3 Ways to Ride the LNG Fired Rocket originally appeared on Fool.com and is written by Piyush Arora.

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