The key to long term wealth:

Find great companies at a reasonable price and hold for a long time to allow the magic of compound returns.

1. Venture Global (NYSE: VG)

Headquartered in Arlington, Virginia, Venture Global (NYSE: VG) is a fast-growing liquefied natural gas (“LNG”) exporter founded in 2013 by Michael Sabel and Robert Pender.

Reasons to buy Venture Global

Venture Global was founded to build LNG projects faster, cheaper, and better than anyone else.

The company pioneered a new approach to LNG terminal construction, based on smaller liquefaction trains – pre-built in offsite facilities and shipped directly to the project site resulting in a plug and play approach verse the competitions custom build on site. The advantage to VG is the ability to create one liquefaction train design to be used on all their projects making the construction process scalable.

Their first project a 12.4 million ton per annum (mtpa) Calcasieu Pass LNG terminal was completed in record time. Venture Global completed this project a full year faster than a similar project by their largest competitor Cheniere Energy (LNG).

Venture Global now has two facilities producing LNG – its Calcasieu Pass and Plaquemines terminals. The record speed of construction has been a massive win for the company where they went from zero earnings in 2021 to an expected $6.6 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization) this year (just 5% less than what Cheniere is expect to earn).

If the company completes all current projects then Venture Global will be the single largest LNG exporter in the world (more than the entire country of Qatar - current global leader).

I am a buyer below $20 per share

At $20 per share, Venture Global will have an enterprise value (EV) of $78 billion a similar valuation to Cheniere.

2. Franco-Nevada (NYSE: FNV)

Franco-Nevada (NYSE: FNV) is the leading gold royalty company. A royalty company benefits from a rising gold price without direct exposure to the capital intensive activity of mining.

Reasons to buy Franco-Nevada

Franco-Nevada is a capital efficient way to have a leveraged exposure to a rising gold price. They operate like a bank where they provide capital to mining companies in exchange for a percentage of the mines production. They are able to run the business with just 40 full-time employees and 5 part-time contractors. The company generated $550 million in net income last year or $12 million per employee.

Franco-Nevada converts a large portion of revenue into free cash flow which is used to acquire additional royalties, share purchase buybacks or dividend payments.

If you are looking for a hedge against inflation and U.S. dollar devaluation, Franco-Nevada should be a part of your precious metals portfolio to protect your wealth and even grow it over time.

I find shares attractive below $170 per share

3. British American Tobacco (NYSE: BTI)

British American Tobacco (NYSE: BTI) owns the second largest portfolio of tobacco brands in the U.S. behind Altria, including Camel, Lucky Strike, Dunhill, Kool, and others.

Reasons to buy British American Tobacco

British Tobacco also owns a strong portfolio of less-harmful tobacco alternatives, including its VUSE vaping product and the VELO brand of nicotine pouches.

As traditional cigarette sales continue to decline the companies new projects drive revenue growth to the company. Last year they earned $33 billion in revenue and $10 billion in free cash flow. Compared to Philip Morris International (PM), which generated $38 billion in revenue and $11 billion in free cash flow. Philip Morris is trading at a $280 billion market capitalization and British Tobacco is only worth $80 billion. Based on the revenue and cash flow comparison, BTI should not be trading at a 70% discount to PM.

I believe this discount will disappear over time, providing investors with a large upside just to catch up to PM without factoring any growth in the future. Not only is it a great buy today but you will be paid a 6% dividend yield while waiting for the capital appreciation.

I think shares are a great buy below $60 per share

To your success,

Thomas Moore

Disclosure: The author plans on being long VG and FNV within 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.