Natural gas is abundant, cheap and clean here in America. That's opening up more opportunities to use the fuel both here and abroad. One of the companies at the crossroads of that opportunity is Chart Industries (GTLS 2.63%).
Chart is a leader in manufacturing the equipment necessary to process, store and distribute natural gas. Because of this, the company is well positioned to profit from two major long-term trends focused on increasing the demand for American natural gas. Let's take a closer look.
Fueling our future
Cheaper and cleaner natural gas is beginning to make inroads as a transportation fuel here in America thanks to companies like Clean Energy Fuels (CLNE 4.53%). The company is building America's Natural Gas Highway and is helping to drive the adoption of natural gas within America's trucking industry.
Source: Clean Energy Fuels
However, natural gas needs to be either compressed or liquefied before it can be put into a fuel tank and used as a transportation fuel. This is where Chart Industries comes into play as it makes many of the components that address the entire liquefied natural gas, or LNG value chain. In fact, the company was recently awarded by a major oil company to build 20 retail LNG refueling stations at its chain of truck stops stations.
Chart Industries developed many of the core technologies for vehicle refueling 20 years ago, which is why it is so well positioned for the future expansion of this industry.
Exporting our excess
The other major future driver of its business is the LNG export market both in America and abroad. Companies like Cheniere Energy (LNG -0.73%) are spending billions to build LNG export facilities to send cheap American natural gas to overseas markets where it can fetch a premium price. However, just like with transportation, natural gas needs to be liquefied in order to be shipped overseas.
The opportunity here is immense. Cheniere Energy, for example, is in the process of building up to six liquefaction trains at two separate locations. These are just two of more than two dozen proposed projects just in the U.S. and Canada that have made application to export natural gas. While just a hand full of projects have been approved, over time more will likely be given the green light.
Chart makes the heat exchangers, cold boxes and related equipment used to liquefy the gas on one end and regasify it on the other end of the trade. With operations that span the globe, it is well positioned to profit from the growth of the LNG trade. Not only that, but it continues to expand capacity in key markets like China where it recently acquired a heat exchanger operation. Bottom line, Chart Industries will be a key supplier to the companies spending billions to export natural gas.
Investor takeaway
As great as those two opportunities are, what makes Chart Industries such an irresistible buy today is that its stock has sold off by more than 25% over the past month after it lowered fourth-quarter guidance. This isn't a company whose future is measured in quarters, but in the opportunity ahead of it over the next decade. That's why I personally couldn't resist adding more shares to my portfolio recently. Add it all up, and Chart Industries a great long-term opportunity for investors looking for an interesting way to profit from America's abundance of natural gas.
Three more stocks for America's energy boom
