Liquefied Natural Gas Ltd shareholders: Look away now

Attention Liquefied Natural Gas Ltd (ASX: LNG) shareholders: Look away now!

Source: Google Finance

Source: Google Finance

At the time of writing, shares in the prospective LNG tolling facility owner are down more than 10%, taking the three-day losing streak to nearly 30%.

What’s going on with the LNG Ltd share price?

After the LNG Ltd share price surged late last month, rumours began circulating that the $380 million company could be the subject of a takeover.

However, last week, the company announced it was not aware of any material information about a takeover. That day, shares peaked at $1.26. Today, LNG Ltd shares change hands at just $0.76.

Adding to the selling pressure the following day was news the company would be dropped from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), Australia’s premier stock market index.

LNG Ltd’s removal from the index follows a year of significant market underperformance. In the 12-month period to 30 May 2016, LNG Ltd shares fell 86% versus the market’s decline of 6.4%.

Now outside the Australian market’s key index, institutional investors may be prohibited from investing in the company.

Foolish takeaway

Short-term price movements are just that. So unless the company’s fundamentals have changed for the better, most share price surges will prove to be unsustainable.

Long-term investors are reminded to focus on the underlying business and avoid letting the market be your master.

LNG Ltd is yet to produce any meaningful revenue and so long as oil prices remain subdued its long-term feasibility could be called into question. If investors are seeking oil exposure  Woodside Petroleum Limited (ASX: WPL) and  Oil Search Limited (ASX: OSH) are more appealing to this Fool.

Forget LNG Ltd, this "dirt cheap" company is growing like gangbusters, and trading on a fat dividend yield, FULLY FRANKED. With interest rates set to stay at these low levels for years to come, for income-hungry investors, including SMSFs, this ASX company could be the "Holy Grail" of dividend plays for 2016. Click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required.

Motley Fool Contributor Owen Raszkiewicz owns one share of LNG Ltd. You can follow Owen on Twitter @ASXinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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