NEXT

NextDecade($NEXT) Sees Heavy Insider Buying Including $2M CEO Purchase as Major LNG Contracts Highlight Undervaluation Appeal

11/14/2025 01:08

NextDecade ($NEXT) executives and major shareholders orchestrated a concentrated buying spree in mid-September, signaling strong insider confidence that this mid-cap energy company developing the Rio Grande LNG facility in Texas is significantly undervalued at current levels around $7 per share. The most notable move came from CEO Matthew Schatzman, who purchased 281,500 shares on September 12 at an average price of $7.14, totaling approximately $2.01 million. During the same period, board member William Vrattos made two separate purchases totaling 600,000 shares worth $3.66 million. Even more impressive was major shareholder Hanwha Aerospace's additional stake building through two separate purchases in late September and early November, totaling $3.59 million. Their buying prices in the $6-7 range suggest insiders view the current valuation as a significant discount. NextDecade is developing the Rio Grande LNG facility in Texas with an annual export capacity of 17.6 million tonnes. The project, estimated at $18.4 billion, has construction underway for trains 1-3. Notably, the company has secured 20-year long-term supply contracts with global energy giants including Saudi Aramco, TotalEnergies, and Japan's JERA. For trains 4 and 5, NextDecade has also finalized $9 billion in construction contracts with Bechtel, solidifying expansion plans. However, NextDecade's journey hasn't been smooth. In August 2024, a federal court revoked FERC's authorization, causing shares to plummet from $8 to the $4 range. While regulatory clarity helped the stock recover to $12 in July 2025, it has since retreated to current $7 levels. The recent massive insider buying suggests confidence that major regulatory hurdles are behind them and the business is entering full operational mode. The LNG market outlook remains positive. Global LNG demand is expected to grow 50% by 2030, with the U.S. emerging as the world's largest LNG exporter. NextDecade's long-term supply contracts provide 20-year revenue stability, particularly enhancing export prospects to Asian markets. Hanwha Aerospace's continued stake building also represents Korean companies' strategic investment in U.S. energy infrastructure. Investors should closely monitor FERC's final environmental approval. The July recommendation from FERC staff for final environmental approval of the Rio Grande LNG project is a positive signal. Additionally, the fixed-price contract with Bechtel valid through mid-September limits cost escalation risks. However, concerns over global LNG oversupply and construction cost inflation remain risk factors. In an optimistic scenario, final investment decisions for trains 4 and 5 proceed smoothly, existing contracts are executed without issues, and commercial operations beginning in 2029 could generate approximately $1 billion in annual cash flow. The base case assumes some delays but overall project execution according to plan. Risk scenarios to watch include additional environmental regulations, construction cost spikes, or global LNG market downturns. At a current market cap of $1.6 billion, NextDecade trades at a significant discount for a company developing an $18.4 billion project. The concentrated insider buying provides strong confirmation of this valuation appeal. However, given the high volatility and execution risks inherent in LNG development projects, this represents an investment opportunity worth considering for investors with sufficient risk tolerance.