Dorian LPG is Thursday's IBD Stock Of The Day, as the liquefied petroleum gas transporter closes in on a buy point. LPG stock edged up Thursday afternoon and has advanced sharply for the week — despite a 2% drop in the S&P 500.
The Connecticut-based company operates a fleet of 25 vessels transporting liquefied petroleum gas (LPG). Traditionally the main trading route in the LPG shipping industry has been from the Persian Gulf to Asia. However, the rise of the U.S. as a major LPG export hub has expanded routes from the U.S. to Asia and to Europe.
Dorian LPG customers include ExxonMobil, Chevron and other energy giants.
Liquefied petroleum gas is a product refined from crude oil and containing propane, butane and isobutane. In the U.S., LPG is commonly called propane, even though propane does not include any other gases.
Liquefied petroleum gas is primarily used in central heating systems and as the raw material for chemical plants.
Dorian LPG Stock
LPG stock climbed 1.9% to 28.15 Thursday during regular market trade. Dorian LPG has formed a cup-with-handle base. It is currently around 4% below a 28.69 buy point, according to MarketSmith chart analysis.
It is important to note that LPG is in a fourth-stage base. This is considered a late-stage base, a factor that adds some risk that a breakout will not succeed.
The Oil & Gas -Transport/Pipeline industry group has gained about 7% in 2023, underperforming the general market. However, Dorian LPG stock has surged 52% on the year.
On Aug. 2, Dorian LPG announced first-quarter fiscal 2024 results. The company reported worse-than-expected earnings and revenue. However, analysts forecast full-fiscal year profit growing 16% to $4.91 per share with revenue increasing 17% to $456.2 million, according to FactSet.
In the company's market outlook at the end of the fiscal first quarter, Dorian LPG reported that the shipping market historically is stronger in the spring and summer months in anticipation of increased consumption of propane and butane for heating during the winter months.
"Demand for our vessels therefore may be stronger in our quarters ending June 30 and Sept. 30 and relatively weaker during our quarters ending Dec. 31 and March 31," the company said.
Dorian LPG stock has a Composite Rating of 97 out of 99 with a 96 Relative Strength Rating. LPG stock also has an EPS Rating of 98 out of 99.
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