New Fortress (NFE) bills itself as being at the forefront of the clean energy trend, helping its customers lower costs and reduce emissions by replacing oil-based fuels with liquified natural gas (LNG), while aiming to be the world’s largest provider of carbon-free power, explains Mike Cintolo, editor of Cabot Top Ten Trader.

The company helps businesses of all sizes convert existing power generation into clean-burning LNG facilities. While LNG operations remain the lion’s share of its business, New Fortress is currently expanding into the green energy space via Zero Parks, which plans to provide carbon-free power by replacing fossil fuels with affordable zero-emission hydrogen.

New Fortress just entered an agreement with Plug Power (PLUG) to build a 120-megawatt industrial-scale green hydrogen plant in Texas, expected to be one of the largest of its kind in North America, enabling the production of more than 50 tons a day of green hydrogen.

An even bigger tailwind for New Fortress comes from the war in Ukraine, which has accelerated its Fast LNG segment, which provides modular, midsize platform-and-jack-up-mounted natural gas liquefaction plants or similar offshore infrastructure designed for faster buildout than today’s floating liquefaction vessels and onshore liquefaction terminals.

Customers are now contracting with New Fortress to build the liquification terminals (typically produced in 18-to-20 months) to help alleviate the energy crisis in Europe. In Q2, New Fortress saw its revenue expand 161% from a year ago, and while there was an accounting loss business is big and getting bigger:

The company said it remains on track to achieve its goal of over $1 billion in adjusted EBITDA in 2022 and over $1.5 billion in 2023 before taking into account the expected contribution from the Fast LNG units. Analysts see high double-digit growth into 2024. It’s an intriguing story.

Technically, NFE had a decent post-crash run in 2020, but that was mostly erased until the Russian invasion — which caused the stock to more than double in just a couple of months.

From there, shares bobbed and weaved in the second quarter, but after a shakeout to the mid $30s, NFE is back at it, running higher (first on low volume, but then big volume last week) in a persistent manner. There’s some old overhead to chew through, so look for a pullback to enter and, given the stock’s volatility, use a loose leash.

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