Our Stock of the Week is Tellurian Inc. (TELL). Tellurian is a global natural gas business that delivers natural gas to customers worldwide. It is currently constructing its $16.8 billion Driftwood LNG plant in Louisiana, and it will become the first integrated global gas pure-play in the U.S.
The economics of exporting Liquid Natural Gas (LNG) is compelling. It is expected that the Driftwood facility will have an annual capacity of 550 billion cubic feet of gas once phase one is complete. The current spot price at the hub in Louisanna is $4.56. European prices are expected to average $26, while Asian spot prices are around $27 and are rising and are now close to $30.
This is a highly profitable business, but it will take a while before TELL is operational. The market is anticipating substantial profits down the road, and the stock is acting well. Recently Credit Suisse upgraded TELL to Outperform and gave it a target of $8.
Technically the stock has been forming a high-level base and is testing highs as the price of LNG continues to soar. As always, we would not chase the stock on Monday morning but will actively trade it as we watch for a break out more or a pullback to support.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and will buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in TELL. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.