The world’s thirst for oil and natural gas continues to grow. The International Energy Agency just increased its forecast for oil demand by 200,000 barrels per day in 2023 alone!
After the fallout with Russia’s invasion of Ukraine, Europe still needs exports from the Middle East and the U.S. to satisfy its need for these commodities (as I mentioned in depth in my piece earlier this week).
The most reliable way to move oil from one point to another is via ship.
And that’s where another lucrative trend comes in.
Logistics — aka efficiently moving goods and services from one point to another — is an integral part of the oil and gas supply chain.
And the logistics market is growing at a rapid pace. Waterway transportation was the fastest-growing segment in 2022.
Precedence Research found the global logistics market worth $10.7 trillion in 2022. It forecasts that value to rocket up more than 70% by 2032:
And increased demand for waterway transportation will lead that charge.
I’ve found a way we can profit from these trends using our incredible and proprietary Stock Power Ratings system.
Today’s Power Stock is Scorpio Tankers Inc. (NYSE: STNG), a $3.6 billion company that transports oil and petroleum products all across the globe.
Scorpio’s Stock Power Ratings
Monaco-based Scorpio has a fleet of 113 tankers.
Those tankers range in size from massive, long-range tankers to smaller Handymax tankers.
Fun fact: The average age of Scorpio’s 113 tankers is just seven years old.
Scorpio stock scores 96 out of 100 on our Stock Power Ratings system, and we expect it to beat the broader market by 3X in the next 12 months.
STNG’s Stock Power Ratings in March 2023.
Scorpio Stock: Outstanding Growth + Strong Value
Scorpio recently closed out a massive fourth quarter that just adds to my excitement about this stock.
Some of the high points include:
- Total revenue of $493.7 million — a 233.8% year-over-year increase.
- For the year, the company’s revenue was $1.6 billion — a 189% increase over the previous year.
As you can see, STNG has strong bottom-line growth — scoring a 100 on our growth factor.
It also shines as a value stock … scoring a 94 there.
Its price-to-earnings ratio is less than half the industry average.
That means STNG is an outstanding value with incredible growth potential. And you can see how that’s worked out for its stock price in the chart below.
Created in March 2023.
Over the last 12 months, STNG stock has climbed 244.6% higher.
Its oil and gas support peers averaged a gain of 34% over the same time. The whole industry is benefiting from incredible demand, but Scorpio stock has managed to outgain the broader industry by more than seven times!
Zooming in to more recent price action, STNG has gained 38.3% to a new 52-week high since its short-term dip ended in January.
That’s the “maximum momentum” we love to see in stocks, and it looks set for more gains based on its 96 overall score on our proprietary Stock Power Ratings system.
We’re “Strong Bullish” and expect it to beat the broader market by at least 3X in the next 12 months.
And for a little extra incentive, STNG’s 1.31% forward dividend yield pays shareholders an additional $0.80 annually for every share they own.
We need more oil and gas now than ever before — and the global logistics industry is working hard (and raking in profits) to get these critical commodities to where they’re needed most.
The most reliable way to transport from the U.S. and the Middle East around the world is via tanker.
As a leader in the oil tanker industry, STNG is a strong contender for your portfolio.
Bonus: If you want another way to play the oil demand mega trend, but maybe you want more yield, you’ve got to check out the latest issue of Green Zone Fortunes.
Adam, and co-editor Charles Sizemore, landed on a company that transports liquified natural gas that is turning its massive profits into a lucrative (and sustainable) dividend that yields close to 9%!
Click here for information on how to sign up for Green Zone Fortunes and gain access to their high-conviction recommendation now.
Stay Tuned: A Second Oil and Gas Boom
I’m sticking with the energy theme.
Tomorrow, I’m going to explore what’s going on with gas prices, U.S. oil reserves and how you can capitalize on what’s coming next.
Safe trading,
Matt Clark, CMSA®
Research Analyst, Money & Markets