CoolCo – How to Play War in Ukraine II. Quantafuel

I wrote about investment ideas how to protect portfolio in the war time last week. The ideas are up 20-40% in a week.

Today is another idea from this bucket. CoolCo (COOL), an LNGC tanker spin off from Golar LNG had an IPO two weeks ago. The company is still in blackout (brokers involved in the IPO are not allowed to publish a research for 30 days from the IPO launch), no research therefore available. CoolCo is off radar screens of most investors. That should change within two weeks as blackout end.

Company website: https://www.coolcoltd.com/who-are-we

There are two plays with this asset. First is the blakcout play. There were several banks in the IPO Syndicate. When they are out of blackout the stock gets investors attention, as brokers will publish their research.

Second is the Russian sanction play. If Russia limits the gas supplies to Europe, LNG carriers would be an ideal hedge. Europe will try to source the gas from Quatar and other places. CoolCo would be one of the beneficiaries. I think the supply diversification will happen in any case. Europe will want to reduce its Russia dependence. It is silly that we are funding Russia to make a war against us.

Mishandled IPO – the IPO was placed at 88NOK. The market conditions worsened during the subscription period, the company panicked and closed the deal early. That resulted in many investors getting too high allocations. Some got too much and sold the shares when trading opened. That pushed the share down to mid 70s NOK. The share price re-rated back to around 80 NOK, still 10% below IPO price two weeks ago.

In summary the stock is cheap by mishandled IPO. The re-rating should come organically with the end of blackout period when brokers will publish their research. The could be a material uplift if Russia would limit gas supplies. Even if there is no gas interuption from Russia, EU will try to reduce dependence on Russia gas. That all should benefit CoolCo.

Other news

Quantafuel yesterday reported that Thorleif Enger, Member of the Board of Directors in Quantafuel ASA, has bought 30,000 shares in Quantafuel ASA through Thoeng AS at a price of NOK 17.88 per share. After the transaction, Thorleif Enger and affiliates hold 189,300 shares. We are reporting we have increased our position by similar amount. We believe QFUEL is close to commercialization. We are very bullish on this opportunity. The risk reward is very attractive.

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Disclosure: 

The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.

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