OB:FLNG

Stock Analysis Report

Executive Summary

Flex LNG Ltd., through its subsidiaries, engages in the transportation of liquefied natural gas worldwide.

Rewards

Trading at 77.1% below its fair value

Earnings are forecast to grow 39.29% per year

Earnings grew by 44% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential and good value.

Share Price & News

How has Flex LNG's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FLNG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-16.2%

FLNG

-11.9%

NO Oil and Gas

-10.1%

NO Market


1 Year Return

-43.3%

FLNG

-25.4%

NO Oil and Gas

-9.4%

NO Market

Return vs Industry: FLNG underperformed the Norwegian Oil and Gas industry which returned -25.4% over the past year.

Return vs Market: FLNG underperformed the Norwegian Market which returned -9.4% over the past year.


Shareholder returns

FLNGIndustryMarket
7 Day-16.2%-11.9%-10.1%
30 Day-21.4%-19.2%-10.0%
90 Day-31.9%-17.1%-7.2%
1 Year-42.7%-43.3%-21.1%-25.4%-4.7%-9.4%
3 Yearn/a14.0%-0.3%18.9%3.9%
5 Yearn/a25.5%0.7%43.8%11.8%

Price Volatility Vs. Market

How volatile is Flex LNG's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Flex LNG undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FLNG (NOK59.5) is trading below our estimate of fair value (NOK260.28)

Significantly Below Fair Value: FLNG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FLNG is poor value based on its PE Ratio (20.4x) compared to the Oil and Gas industry average (14.5x).

PE vs Market: FLNG is poor value based on its PE Ratio (20.4x) compared to the Norwegian market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: FLNG is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: FLNG is good value based on its PB Ratio (0.4x) compared to the NO Oil and Gas industry average (0.7x).


Next Steps

Future Growth

How is Flex LNG forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

39.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FLNG's forecast earnings growth (39.3% per year) is above the savings rate (0.7%).

Earnings vs Market: FLNG's earnings (39.3% per year) are forecast to grow faster than the Norwegian market (18.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FLNG's revenue (27.9% per year) is forecast to grow faster than the Norwegian market (3.2% per year).

High Growth Revenue: FLNG's revenue (27.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FLNG's Return on Equity is forecast to be low in 3 years time (7%).


Next Steps

Past Performance

How has Flex LNG performed over the past 5 years?

40.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FLNG has high quality earnings.

Growing Profit Margin: FLNG's current net profit margins (14.1%) are lower than last year (15.3%).


Past Earnings Growth Analysis

Earnings Trend: FLNG has become profitable over the past 5 years, growing earnings by 40.6% per year.

Accelerating Growth: FLNG's earnings growth over the past year (44%) exceeds its 5-year average (40.6% per year).

Earnings vs Industry: FLNG earnings growth over the past year (44%) exceeded the Oil and Gas industry 34.4%.


Return on Equity

High ROE: FLNG's Return on Equity (2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Flex LNG's financial position?


Financial Position Analysis

Short Term Liabilities: FLNG's short term assets ($143.9M) exceed its short term liabilities ($57.7M).

Long Term Liabilities: FLNG's short term assets ($143.9M) do not cover its long term liabilities ($744.3M).


Debt to Equity History and Analysis

Debt Level: FLNG's debt to equity ratio (93.1%) is considered high.

Reducing Debt: FLNG's debt to equity ratio has increased from 3.3% to 93.1% over the past 5 years.


Balance Sheet

Inventory Level: FLNG has a high level of physical assets or inventory.

Debt Coverage by Assets: FLNG's debt is not covered by short term assets (assets are 0.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: FLNG is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: FLNG is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Flex LNG's current dividend yield, its reliability and sustainability?

6.32%

Current Dividend Yield


Dividend Yield vs Market

company6.3%marketbottom25%3.0%markettop25%6.5%industryaverage7.7%forecastin3Years12.1%

Current dividend yield vs market & industry

Notable Dividend: FLNG's dividend (6.32%) is higher than the bottom 25% of dividend payers in the Norwegian market (3.03%).

High Dividend: FLNG's dividend (6.32%) is low compared to the top 25% of dividend payers in the Norwegian market (6.52%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether FLNG's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if FLNG's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.3%), FLNG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FLNG's dividends in 3 years are forecast to be covered by earnings (68.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure


CEO

Øystein Kalleklev (39yo)

1.5yrs

Tenure

0

Mr. Øystein M. Kalleklev has been Chief Executive Officer of Flex LNG Ltd since August 2018 and served as Chief Financial Officer since October 2, 2017. Mr. Kalleklev has extensive experience in the shippi ...


Leadership Team

NamePositionTenureCompensationOwnership
Øystein Kalleklev
Chief Executive Officer1.5yrsno data0.065% $2.1m
Harald Gurvin
Chief Financial Officer1.1yrsno data0.018% $595.0k
Thomas Thorkildsen
Senior Vice President of Business Development3yrsno datano data
H. Foss
Head of Commercial1.5yrsno data0.0023% $75.3k
Thorolf Aurstad
Senior Vice President of Finance0yrsno datano data
James Ayers
Company Secretary0yrsno datano data

1.5yrs

Average Tenure

Experienced Management: FLNG's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Ola Lorentzon
Independent Director2.7yrsUS$40.00k0.0040% $128.5k
David McManus
Chairman of the Board8.4yrsUS$100.00k0.17% $5.4m
Nikolai Grigoriev
Independent Director2.4yrsUS$40.00k0.011% $356.7k
Marius Hermansen
Independent Director4.2yrsUS$40.00k0.011% $367.0k
Joao Saraiva e Silva
Director0.4yrsno datano data

2.7yrs

Average Tenure

55.5yo

Average Age

Experienced Board: FLNG's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 35.3%.


Top Shareholders

Company Information

Flex LNG Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Flex LNG Ltd.
  • Ticker: FLNG
  • Exchange: OB
  • Founded: 2006
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: kr3.220b
  • Shares outstanding: 54.11m
  • Website: https://www.flexlng.com

Number of Employees


Location

  • Flex LNG Ltd.
  • Par-La-Ville Place
  • 4th Floor
  • Hamilton
  • 1593
  • Bermuda

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0RQ8LSE (London Stock Exchange)YesOrdinary SharesGBNOKJun 2017
FLNGNYSE (New York Stock Exchange)YesOrdinary SharesUSUSDJun 2017
FLNGOB (Oslo Bors)YesOrdinary SharesNONOKJun 2017
0QQADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2017

Biography

Flex LNG Ltd., through its subsidiaries, engages in the transportation of liquefied natural gas worldwide. The company has a total fleet of four LNG carriers. It also provides chartering and management services. Flex LNG Ltd. was founded in 2006 and is based in Hamilton, Bermuda. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 23:21
End of Day Share Price2020/02/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.