Shares in natural gas focused company Liquefied Natural Gas Limited (ASX: LNG) (OTCMKTS: LNGLF) jumped 5% higher this morning, as the ALL ORDINARIES (INDEXASX: XAO) bounced back from a month-long slump.
Although no company specific news has been released this morning, shares in the $1.37 billion company have been on a downward spiral over the past month, trading 30.5% lower. In the past quarter, the Brent crude oil price has fallen from above $US105 per barrel to $US84.50 per barrel whilst the price of Natural Gas has remained mostly flat, at $US3.77, despite high levels of volatility.
Perth-based Liquefied Natural Gas Limited has a vision of providing mid-scale LNG liquefaction and tolling facilities in North America. Although not yet profitable, if the company can deliver on its goals, its share price would look seriously cheap in hindsight.
Indeed, the company’s share price is up a whopping 947% this year alone (at one stage it was up more than 1,400%).
Buy, hold, or sell?
I bought into Liquefied Natural Gas Limited shares at the beginning of the year, when they traded at just $0.30, knowing full well the risks that were involved. Despite the share price climbing rapidly, many of those risks still lay ahead.
However, I continue to believe there will be upside in its shares, even at today’s prices, if it can execute on its strategy to develop its Magnolia facility in Louisiana, USA. It’s also important to remember that it remains a high-risk/high-reward investment.
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Motley Fool Contributor Owen Raszkiewicz owns shares of Liquefied Natural Gas Limited.
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