Cheniere Energy Inc (LNG)

[Timothy Smith]

Interesting to note: Seth Klarman's Baupost Group and other hedge fund interests in the name. Having read Klarman's "Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor," I was surprised to see that LNG had become a favorite of Seth Klarman's Baupost Group (in fact, LNG is Klarman's fund's largest holding at 13MM shares, or approximately 20% of the portfolio as of YE 2014). In Margin of Safety Klarman preaches deep value investing.

Cheniere at prices 300% higher than 3 years ago and encumbered by ~$12Bn in debt with only ~$9Bn in PPE would see an easy pass to an investor like Klarman. Perhaps Klarman, like most of the investment world, is starved for yield, but surely there are more attractive plays for yield than LNG.

More likely, Klarman sees Cheniere as a drastically mispriced asset that over the next 5-7 years will continue to de-risk, execute, and become cash flowing as it delivers American Natural gas to Europe and Asia on long term (20 year) contracts.

Cheniere Energy: Current Price Provides Long Term Investment Entry $LNG
http://www.seekingalpha.com/article/3143496