StealthGas Inc

StealthGas Inc. (NASDAQ: GASS) is a provider of international seaborne transportation services to liquefied petroleum gas (LPG) producers and users, as well as crude oil and product carriers to oil producers, refineries and commodities traders. The Company owns a fleet of LPG carriers. Its LPG carriers carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of crude oil and natural gas.

Recent Financial and Business Updates:

• Operational and Financial Highlights:
  • Record-Breaking Performance: The company achieved an all-time high net income of USD 51.9 million for the twelve-month period, marking a remarkable 51% increase compared to the previous year, equating to a basic EPS of USD 1.38. Strong profitability persisted into the fourth quarter with a net income of USD 8.9 million for the three-month period, resulting in a basic EPS of USD 0.25.
  • Enhanced Fleet Coverage: Fleet coverage expanded significantly, with approximately 66% of fleet days for 2024 secured on period charters, generating over USD 200 million in contracted revenues for all subsequent periods, excluding joint venture vessels.
  • Share Repurchase Program and Debt Reduction: During the fourth quarter, the company repurchased 2.01 million shares, bringing the total repurchased shares to 3.9 million, exceeding 10% of outstanding shares, at a total of USD 19.1 million under the USD 25 million share repurchase program. Additionally, debt was substantially reduced by USD 153.6 million during 2023, further bolstering the company's financial position.
  • Strong Cash Position and Fleet Expansion: With cash and cash equivalents, including restricted cash, totaling USD 83.8 million as of December 31, 2023, the company maintained ample liquidity to continue debt reduction efforts. Moreover, the successful delivery of Medium Gas Carrier (MGC) new buildings Eco Oracle and Eco Wizard in January 2024 reflects the company's commitment to fleet expansion and modernization. 

• Fourth Quarter 2023 Results:
  • Revenue and Expense Analysis: Revenues for the fourth quarter of 2023 amounted to USD 34.1 million, reflecting a decrease compared to the same period in 2022, primarily attributed to the reduction in the number of vessels owned. Various expense categories, including voyage expenses, vessels’ operating expenses, and drydocking costs, exhibited fluctuations compared to the prior year period, influenced by fleet size and operational dynamics.
  • Net Income and Earnings per Share: Despite revenue challenges, the company reported a net income of USD 8.9 million for the fourth quarter of 2023, marking a 16% increase compared to the same period in 2022. Earnings per share for the quarter amounted to USD 0.25, demonstrating resilience amidst operational adjustments.
• Twelve Months 2023 Results:
  • Financial Performance Overview: For the twelve months ended December 31, 2023, the company reported revenues of USD 143.5 million, with various expense categories experiencing fluctuations compared to the prior year. Notably, net income for the twelve-month period surged to USD 51.9 million, reflecting a significant increase compared to 2022, driven by strategic initiatives and operational efficiencies.
  • Chartering Arrangements and Fleet Expansion: The company announced multiple chartering arrangements, securing revenues of approximately USD 200 million and enhancing fleet coverage for the year 2024. Joint venture vessels also contributed to fleet expansion through additional charter agreements, further strengthening the company's position in the market.
  • Asset Transactions and Financial Position: Asset transactions, including vessel sales and newbuild deliveries, underscored the company's commitment to fleet optimization and modernization. Additionally, finance proceeds from recently concluded credit facilities provided further financial flexibility to support ongoing operational and growth initiatives.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at 54.09, and is currently upward trending, with expectations of a consolidation or an upward momentum. Additionally, the stock's current positioning is above the 21-period SMA and 50-period SMA, which may serve as dynamic short to medium-term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to StealthGas Inc. (NASDAQ: GASS) at the current market price of USD 6.12 as of May 01, 2024, at 06:55 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is May 01, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.