Golar LNG Ltd. (GLNG)

[eastunder]

Shortsellers Down On Golar LNG and Its Limited Partner.EmailPrint
smaller Larger By Dimitra DeFotis

http://blogs.barrons.com/stockstowatchtoday/2012/03/12/shortsellers-down-on-golar-lng-and-its-limited-partner/?mod=yahoobarrons

An independent research outfit called Pandora’s Box Research recommended selling Golar LNG ( GLNG), a Bermuda-based shipping company engaged in the transport, re-gasification and liquefaction of natural gas, and a related entity, Golar LNG Partners (GMLP), which is a limited partnership that owns and leases floating storage, re-gasification and LNG carriers.

Pandora’s Box researchers, who are not named, have short positions in the stocks, according to its online report, in PDF format. The call got a lot of chatter after Muddy Waters Research, well known for its own short calls on Chinese smallcaps, mentioned it on Twitter.

Golar LNG, which has a number of affiliated shipping companies and management based in Norway, has a market cap of $3.1 billion and pays a nearly 3.3% yield; its shares fell 3.63% Monday, or $1.50, to $39.77.
Golar LNG Partners, pays a 4.54% yield; its shares fell 1%, or 39 cents, to $37.89. It fetched $22.50 in its April 2011 IPO.

In its summary of the sell recommendation, Pandora’s Box is critical of GLNG’s dividends as being based on one-time items, saying the “real” yield is 1.9% after accounting for vessel depreciation. It also says that GLNG has shifted vessels between companies at inflated prices, and the valuations on both names don’t support their current prices.

Shipping analyst Erik Nikolai Stavseth, with Arctic Securities in Oslo, Norway, has a Buy rating on Golar LNG, and says it is the leader in LNG ship owners, and is well positioned with new ships. Its capital spending is being funded in part by fresh convertible offerings.

Investors had shorted about 5% of Golar LNG shares outstanding at the end of February, and about 1.25% of Golar LNG Partners’. Not big short positions, in other words.

Muddy Waters is the outfit that crushed a handful of small, Chinese companies listed through reverse mergers in the United States. Its independent researchers dug up accounting exaggerations and fraud and issued short calls, while holding short short positions in the subject companies.

Carson Block, director of research at Muddy Waters, tells Barrons.com in an email that “we don’t have an opinion” on either Golar entity. But he said the report, also referenced on a site pushing democratized, online original research, represents an “interesting direction in the world of independent, open-distribution research.”