Over the past few years, Chart Industries (NASDAQ:GTLS) has rewarded investors quite well. Shares are up more than 124% over the past three years and, since early 2016, have more than tripled in value. But over the past few months, investors have sold in droves, pushing shares down by 30% from the recent high of nearly $95 per share.

Moreover, there's certainly reason to be concerned that Chart's stock price could fall even more in the short term. Considering the international nature of its business, and how ongoing trade concerns between the U.S. and China could cause further harm to the global economy, investors are, if not worried, then certainly paying more attention.

Yet where Mr. Market sees weakness and uncertainty, savvy investors should see opportunity. That's because, even though there are very real concerns in the near term, with the U.S.-China trade war heating up and potentially undermining global economic growth, the longer-term prospects for Chart to profit from one of the biggest trends in global energy are simply enormous.

That's why, after more than doubling my position in June, I more than doubled it again this week.

A lab setting with a cryogenic liquid being poured into a container.

Image source: Chart Industries.

How Chart Industries makes money

Chart makes equipment and systems used to cool gases to cryogenic liquid temperatures, store, and transport them. Its main customers are industrial gas users including food service, biomedical, and other applications, and energy and petrochemical users. Over the past 12 months, 54% of its business has come from industrial gas applications and 46% from energy applications.

End-user purchases of new equipment can be very cyclical, driven by industry demand and large trends outside of Chart's control. That can be wonderful when demand is growing, as is the current case. Chart's backlog is over $750 million, and that doesn't include several "big LNG" equipment orders it will supply but that have yet to be given the official green light.

It can be tough when demand is weak and end users cut spending on new equipment. For this reason, Chart has invested significant resources to grow its services business, which should help offset the "peaky" nature of its results from cyclical equipment demand. On Chart's second-quarter earnings call, CEO Jill Evanko said the company is progressing toward reaching 20% of sales from services within three years, a nearly 60% increase from current levels.

Here's why I more than doubled down on Chart

Over the past several years, Chart has significantly improved its earnings, while also strengthening the balance sheet and building a stronger business. Since the beginning of 2018, earnings per share has surged 190% higher, while the company has paid down its debt by about one-third and increased its cash position 21%:

GTLS data by YCharts.

At the same time, the company has made a handful of acquisitions that have expanded its core business, while selling off assets, such as its home oxygen concentrator business, which didn't really fit with Chart's core industrial manufacturing strengths.

Moreover, Chart has steadily integrated those acquisitions while simultaneously restructuring existing parts of its business to improve expenses, drive better margins, and position itself for the surge in demand for equipment it supplies to the energy industry -- all while undergoing multiple management changes, including the CEO, and relocating its headquarters.

There's surely at least some luck involved in the company's success and execution over the past few years. But I think Chart's board, which plays a key role in setting the company's long-term goals and choosing its leaders, deserves a lot of credit. And even with the substantial changes Chart has undergone, I'm confident in its future.

And that future is at the core of my decision to substantially increase my investment in the company. Simply put, the development of LNG export, storage, and import facilities around the world is set to accelerate at a massive pace, and few companies are as likely to experience the outsize gains that Chart should.

In 2018, Chart earned $2.73 per share, a strong result that it's set to surpass in 2019; management's full-year guidance calls for $2.85 to $3.20 per share in adjusted earnings. That works out to about 11% growth on a year-over-year basis.

But it's only a drop in the bucket compared to the massive wave of profits Chart should start riding in 2020, when tens of billions of dollars in LNG export facilities are expected to be constructed. According to the company's 2020 outlook, updated in June, management expects to earn between $8.00 and $8.75 per share if a handful of big deals on the verge of getting the green light do move forward next year.

Here's the good news: Even if those deals don't happen next year, Chart expects it will still earn between $5.05 and $5.35 per share next year. That's a substantial amount of earnings growth, even on the low end.

Chart equipment in a gas processing plant.

Image source: Chart Industries.

The risks

In short, Chart has exactly zero control over these big LNG deals, and it's not like other businesses, which have a large pipeline of potential customers. Simply put, there are only so many $15 billion-plus LNG export facilities getting built at any one time, and it's not easy to replace those deals if they fall through or get delayed. Which is exactly why Chart management provides guidance that shows those deals broken apart from its "base" outlook.

Moreover, even the rest of its core business is subject to some cyclicality, and if the global economy were to weaken, that could cause some of Chart's customers to hold off on spending, causing the company to come up short on even its base guidance.

But even within that risk, these are short-term concerns, not business-crippling risks to Chart as a company. In other words, they could cause the stock price to fall for an extended period of time, but investors willing to ride out any unexpected economic weakness that takes a bite out of the company's results should be able to recoup their losses by being patient and holding for multiple years.

On balance, the risks are worth the potential rewards

And I don't even think it's that close. Sure, cyclical businesses make for painful investments when you buy near the peak. But I don't think that's a big risk right now. The thesis for LNG is very strong, with demand for natural gas around the world only set to grow over the next decade to meet increasing energy needs and to replace dirtier fossil fuels like coal. And that demand should outlast any short-term economic hiccups.

From where I see it, if Chart's stock price were to fall further on global economic weakness, I'd probably view it as an opportunity to buy even more. It could delay how long it takes to get the big LNG payoff, but even if it takes a little longer than expected, it's still going to be well worth it.