Blackstone Holdings, a major owner of Cheniere Energy (CQP), recently added to their stake with a 73,359 share buy. The total price came to just under $2.5 million, and represents a nearly 19 percent increase in the fund’s stake of the liquefied natural gas company.
Blackstone has been a buyer through a number of various legal entities in the past year. One director has sold shares in the past year.
Overall, insiders own just over 49.5 percent of the firm.
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Shares of the firm are still down about 15 percent in the past year. Despite a 33 percent drop in revenue, liquefied natural gas remains profitable and in demand, and the company earns a 20 percent profit margin, a high level for a commodity-based industry.
Action to take: Investors may like shares here, given their 7.4 percent yield thanks to a partnership structure. The massive insider buying from the highly capable Blackstone is a sign of undervaluation that should be resolved in time.
For options traders, shares have come down a bit in the past month, but have started to tick up in recent sessions. The June 2021 $35 calls are an at-the-money trade going for about $2.45. Look for high double-digit profits as the uptrend continues in the first half of 2021.