GasLog Partners (GLOP) is a Zacks Rank #1 (Strong Buy) that acquires, owns, and operates liquefied natural gas (LNG) carriers under multi-year charters. Higher energy prices continue to be a tailwind for LNG carriers. This has brought attention to the sector and companies like GasLog.
The stock has broken out to levels not seen since early 2020. In a year where many stocks have struggled, GLOP is up over 85% on the year.
The company recently reported a big earnings beat and analysts are hiking estimates. With the stock heading higher on that news, it looks like investors think there is more meat on the bone for GLOP.
More about GasLog
The company was founded in 2014 and is headquartered in Piraeus, Greece. As of February 24, 2022, it operated a fleet of 15 LNG carriers.
GLOP has market cap of $410 million and pays a dividend of 0.50%. The stock has a Zacks Style Score of “A” in both Value and Momentum, as well as a “B” in Growth.
Q3 Earnings Beat
In late October, GasLog reported an EPS beat of 133%. Q2 came in at $0.63 v the $0.34 last year and revenue was $95.7M, up from $80.5M last year. Adjusted EBITDA came in at $73.3M v the 57.3M y/y.
The big beat stemmed from higher LNG spot rates in a very tight market.
Management said the strength was a result of their ability to secure period charters for their vessels. Additionally, management had positive comments on de-risking the balance sheet, which was accomplished by their deleveraging strategy.
Three months ago, we wrote about GLOP and its success being derived from strong LNG demand. The story continues today as we still see low inventories in Europe and continued disruption of gas pipeline imports from Russia.
While LNG imports have recovered to seasonal levels, their dependence on carriers because of the Russian/Ukraine conflict continues. Investors should expect LNG demand to remain high as the war continues.
Since earnings, the company has seen analysts aggressively raising estimates.
Over the last 7 days, numbers have gone higher across all time frames. For the current quarter, we have seen a move from $0.45 to $0.72, or 60%. For the current year, estimates have gone 42% higher, while next year they have surged 48%.
The Technical Take
The stock recently took out the $8 level, a spot is has not seen since before the pandemic. With the fundamentals so good, investors should not be scared at the fact that the stock has almost doubled on the year.
While it’s a hard year to chase stocks, the energy sector has separated itself from the rest of the market. If the stock consolidates below the $8 level, but makes new highs, we could see a quick move above $9.
Longer-term investors looking for a pullback could look at the moving averages for an entry. As of this writing, the 21-day is $6.95 and the 50-day is $6.35. The 200-day likely wont trade this year again, as its all the way down at $5.40.
The success of GasLog been fueled by a surge of global energy prices. The company has deleveraged to position themselves better for the future. And now, the stock is trading at multi-year highs, bringing more attention to the name.
If energy prices remain strong, investors should expect GLOP to resume its trend higher into 2023.
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