We recently compiled a list of the Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus. In this article, we are going to take a look at where Cheniere Energy, Inc. (NYSE:LNG) stands against the other stocks that Jim Cramer’s focused on.
Jim Cramer, the host of Mad Money, expressed strong views regarding day trading on Friday, urging novice investors to avoid the temptation of risky market practices. His warning followed an article from The Wall Street Journal, titled “More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market,” which discussed how an increasing number of investors are developing serious gambling addictions through speculative trading. Cramer emphasized:
“Unless you’re a professional, I’m dead set against day trading, particularly the kind that is based on zero-days-to-expire or zero DTE options. These are options that expire the same day.”
He compared these trades to gambling, urging that they be stopped, as they serve no purpose other than to hook people on the addictive nature of the stock market. Cramer, who highlighted that he has moved away from day trading since retiring, stressed the importance of a more cautious and informed approach. He now advocates for “buy and homework,” his version of buy-and-hold investing, which reflects his belief that things can change with a company and require continuous evaluation.
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Cramer called for self-regulation within the industry and said:
“There’s no reason to push people into zero day options other than pure greed. The industry’s encouraging bad behavior, that’s just plain wrong.”
Cramer further pointed out that day trading is not limited to options but extends to other high-risk investments, such as cryptocurrencies, uranium stocks, and emerging technologies like quantum computing, commercial space, and future mobility stocks. While he expressed confusion over who creates these stocks, he noted that their volatility and high trading volumes indicate they are often used as vehicles for speculative trading rather than sound investments.
Cramer questioned whether the markets could eliminate this behavior, but he firmly believes that a collective value judgment can be made. He particularly criticized the brokerage houses that profit from encouraging risky behavior, stating that these firms must be held accountable for promoting an environment that feeds into people’s gambling instincts.
“After all the markets were created for investing, not day trading on the direction of stocks. There’s a big difference between making an informed investment and pure gambling.”
He called for stronger measures to protect individuals from the dangers of day trading, suggesting that, while it may be impossible to completely eliminate high-risk trades, at the very least, these products should come with warning labels. He condemned those who continue to push these high-risk options, asking whether they truly need the money so badly, and saying, “Shame on you.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 62
Calling Cheniere Energy, Inc. (NYSE:LNG) terrific, Cramer expressed bullish sentiment toward the LNG market as the time nears for the new administration.
“Okay, I like the LNG market now that we have President-elect Trump coming in because he’s pro-LNG and Cheniere is a terrific stock. It’s up 22% for the year, I think you’d still do well.”
Cheniere Energy (NYSE:LNG), a significant player in the liquefied natural gas (LNG) sector, focuses primarily on the ownership and operation of LNG terminals in the United States. It expects to produce around 47 million to 48 million tons of LNG across its two operational sites in the coming year.
This projected production marks an increase from the current 45 million tons per year across the nine existing LNG trains in operation. As per the company, following the commissioning of additional facilities, total production will reach between 46 million and 47 million tons. This will significantly support the company’s EBITDA for 2025. The company forecasts that around 3 million to 4 million tons of this production will be available for spot sales through Cheniere Marketing International (CMI) after fulfilling its long-term contracts.
These long-term agreements already account for approximately 43 million tons. Further, Cheniere Energy (NYSE:LNG) is actively marketing some of this spot volume for 2025 and expects to have 2 million to 3 million tons, or roughly 100 to 150 trillion TBtu, of unsold open capacity in that year. The company is planning for substantial completion of its remaining four mid-scale LNG trains by 2026, with new long-term contracts beginning in 2026 and 2027.
These additional contracts will maintain a strong position for the company, ensuring that its platform remains over 90% contracted with investment-grade counterparties, while maintaining a consistent revenue stream. With this level of contracting, the company projects an average of about 95% of its capacity will be secured under long-term, take-or-pay contracts through the mid-2030s.
Overall, LNG ranks 5th on our list of stocks that Jim Cramer’s focused on. While we acknowledge the potential of LNG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.