Dorian (LPG) is a Zacks Rank #1 (Buy) and it sports an B for Value and a C for Growth. This stock is undervalued compared to its peers and also has a large dividend coming up.  The company ships liquid natural gas and has moved steadily higher over the last few months.  Let’s explore more about this company in this Bull of The Day article.

Description

Dorian LPG Ltd., together with its subsidiaries, engages in the transportation of liquefied petroleum gas (LPG) through its LPG tankers worldwide. It owns and operates twenty-five very large gas carriers (VLGCs). The company was incorporated in 2013 and is headquartered in Stamford, Connecticut.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For Dorian, I see one beat of the Zacks Consensus Estimate and two misses over the last calendar year.  That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher. 

Over the last 30 days, earning estimates have increased for LPG.

There are no quarterly estimates in the Zacks Research System.

The full year numbers are certainly more important… and they are moving higher.

This year has moved from $3.81 to $4.86.

Next year is now at $2.37 move up from $2.35.

Valuation

The valuation is great here trading at 5.7x forward estimates with the industry average coming in at 17x. Price to book of 1.3x is also well below the 4.6x industry average. Price to sales is at 2.9x and that again is below the 5x industry average.

I see operating margins moving from 34% to 43% so there was a huge move there and that is great to see.

This looks like a very mispriced asset that is going to benefit from sector rotation back into energy.

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