lyash01
Don't Judge VG By Its Busted IPO
Venture Global (NYSE:VG) stock suffered a disastrous IPO process and first quarter of post-IPO trading. I first reviewed the company as part of my article on PIMCO Dynamic Income Strategy
Venture Global: Bad Stock Performance No Indicator Of Good Operational Outlook
Summary
- Venture Global's IPO was disastrous, with the stock price dropping from $25 to single digits due to customer arbitration cases and market conditions.
- VG achieved Commercial Operations at Calcasieu Pass and started producing commissioning cargoes at Plaquemines, rapidly increasing capacity.
- VG's future earnings will be less sensitive to market pricing, shifting from commissioning cargoes to long-term contracts, reducing volatility of results.
- The stock remains undervalued compared to Cheniere. The gap could close as the arbitration overhang is resolved.
I retired early after 22 years in the energy industry with roles in engineering, planning, and financial analysis. I have managed my own portfolio since 1998 and have met my goal to match the S+P 500 return over the long term with lower volatility and higher income. I mostly write on positions I already hold or am considering changing. I prefer to hold positions for the long-term unless there is a compelling reason to sell. I look for investment opportunities without regard to asset class, market cap, sector, or yield. I would rather maximize total return over time by buying when price is low relative to intrinsic value.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of VG, PDX, BP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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