| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 13.21 | n/a |
| Intrinsic value (DCF) | 6.42 | n/a |
| Graham-Dodd Method | 2.62 | n/a |
| Graham Formula | n/a |
Cool Company Ltd. (NYSE: CLCO) is a leading player in the marine shipping industry, specializing in the ownership, operation, and management of liquefied natural gas carriers (LNGCs). Headquartered in Hamilton, Bermuda, the company provides critical supply chain support solutions for the global energy sector. With a modern fleet that includes tri-fuel diesel electric vessels and floating storage and regasification units (FSRUs), Cool Company Ltd. serves third-party clients, ensuring efficient LNG transportation and storage. Since its incorporation in 2018, the company has positioned itself as a key infrastructure provider in the growing LNG market, benefiting from increasing global demand for cleaner energy alternatives. Operating in the industrials sector, Cool Company Ltd. plays a pivotal role in the energy logistics chain, making it a relevant investment for those looking to capitalize on the transition to sustainable energy sources.
Cool Company Ltd. presents an attractive investment opportunity due to its niche focus on LNG carriers and FSRUs, which are in high demand as the world shifts toward cleaner energy. The company’s strong operating cash flow ($146.11M in the latest period) and solid net income ($98.14M) underscore its profitability. However, investors should be cautious of its high total debt ($1.31B) and significant capital expenditures ($187.49M), which could strain liquidity. The dividend yield (approximately 3.7% based on a $0.60 per share payout) adds appeal for income-focused investors. Given its negative beta (-0.088), CLCO may offer some defensive characteristics, though its small market cap ($325.58M) suggests higher volatility and liquidity risks.
Cool Company Ltd. competes in the specialized LNG shipping market, where its competitive advantage lies in its modern, fuel-efficient fleet, including tri-fuel diesel electric vessels that offer operational flexibility and lower emissions. The company’s focus on LNG logistics positions it well amid rising global LNG demand, particularly in Europe and Asia. However, its relatively small fleet size compared to industry giants limits its scale advantages. The capital-intensive nature of the business, evidenced by high debt levels, could constrain growth compared to better-capitalized peers. Additionally, the cyclicality of shipping rates and LNG demand introduces revenue volatility. Cool Company Ltd. differentiates itself through its asset-light approach, leasing FSRUs to third parties, which provides steady cash flows but may limit upside during market booms. Its ability to secure long-term charters will be critical in maintaining stable earnings.