Aegean Marine Petroleum Network Inc. (ANW) research, news, and more from GeoInvesting

Research

Fri, 18 Nov 2016 13:04:07 GMT

ANW ($9.10; marked up 11% pre market) reported Q3 2016 results:

Sales of $1.13 billion vs $1.07 billion in the prior year and ahead of analyst estimates of $
Non-GAAP EPS of $0.45 vs $0.25 and ahead of analyst estimates of $0.33
Investors should note that the company provides two adjusted numbers. The $0.45 reflects what EPS would have been if repurchase of shares occurred at the beginning of Q3. The $0.36 reported still beats analyst estimates. But, the $0.45 is a better indicator the of the company’s future earnings power with its new share structure. We believe analysts will likely need to adjust EPS estimates to the upside based on the the pro forma $0.45 Q3.

Quotes from management:

"We delivered another quarter of solid results against a backdrop of slowness in the container segment and volatile commodity markets. Despite these headwinds, we continue to achieve profitability and strong volumes with our fourth consecutive quarter of selling more than 4 million metric tons of bunker fuel. Our diversified platform, recent expansion in new attractive markets and our back-to-back trading businesses contributed to our growth during the quarter."

Mr. Tavlarios concluded, "Aegean has transformed into a diversified business with operations around the world and we look forward to additional opportunities ahead. We are proud of what we have created and our ability to serve more customers across our global footprint as a leader in the physical supply and marketing of marine fuel. We remain committed to executing our strategic initiatives and leveraging our scale to drive growth and shareholder value."

ANW was one of the stocks we highlighted in our Shipping Screen yesterday. We have since added a few more related companies and encourage you to check the screen. The Baltic Dry Bulk Index rose 7.5% last night, and it seems momentum from many names on the list is continuing in pre market trading. Here is a list of related stocks for members that are looking for long or short opportunities.

Research

Tue, 18 Aug 2015 15:06:04 GMT

Will look to close our long position in ANW

We will look to close out of our $ANW ($11.25) position during today’s trading session. This is our second go ‘round in the ANW story. In our January 28, 2015 e-mail, we stated that we sold our shares in ANW that we purchased when the stock sold off on its convertible note announcement.

It was in our 1/14/2015 e-mail that we stated we felt the selloff was overdone (stock dipped below $13) and we felt shares would recover to the $14 area. We have decided to lock in our profit on our remaining shares and move on to other investment opportunities.

On March 20, 2015 we repurchased a long position based on analyst price target upgrades to $18 from $15. Today, ANW announced Q2 2015 results:

Sales of $1.2 billion vs $1.7 billion in the prior year period, but ahead of analyst estimates of $1.06 billion
EPS of $0.15 vs $0.20 in the prior year and below analyst estimates of $0.26

Quotes from management:

"Aegean Marine has built a strong, global platform that has delivered solid returns in a variety of market conditions. While we faced headwinds during the quarter, we are entering the second half of 2015 with several growth drivers in place and we expect to further improve our financial performance. Our Fujairah facility is operating at strong utilization levels, and our expanded global operations position the Company for continued growth, success and value creation."

Research

Wed, 03 Jun 2015 04:00:00 GMT

ANW: No operational impact from concerns in Greece

In our May 29, 2015 e-mail we stated we would perform more due diligence on the potential, if any, impact the Greek turmoil would have on ANW (ANW’s headquarters are in Athens and the company serves customers across the globe, including in Greece).

We spoke with the company and our takeaways are as follows:

If Greece exits the Euro and moves back to the Drachma, there would very little operational impact. The company’s HQ is in Greece and employees who live there would be impacted, but operations would be little impacted.
Foreign exchange:
- Most revenues are billed in USD.
- There is credit risk if local currencies of customers are adversely impacted by FX and have to convert to USD to pay ANW.
- Material fluctuations between the USD and Euro drive FX gains and losses. Experienced a sizable FX loss in 2014 driven by decline in Euro. Q1 2015 FX flat. Going forward, if Euro resumes decline to parity with the USD or less, ANW will have material FX exposure as they have businesses located in the Eurozone.
- Per Form 20-F: "Generally, in all of our service centers, we invoice our customers for the sale and delivery of marine petroleum products in U.S. dollars. Many of our customers are foreign customers and may be required to obtain U.S. dollars to pay for our products and services. A rapid depreciation or devaluation in a currency affecting our customers could have an adverse effect on our customers' operations and their ability to convert local currency to U.S. dollars to make required payments to us. This would in turn result in credit losses for us, which would reduce our results of operations and cash flows."
Corporate taxes:
- ANW is a Marshall Islands Company and don’t pay income taxes. So little risk if Greece has radical changes in tax rates and actually begin to collect taxes.

With recent analyst price targets as high as $18.00 and what we consider to be a fair value price target of $16.95 based on applying a P/E multiple of 15 on 2015 EPS of $1.13, we feel shares should reach $16 to $17 in the near term. The bigger risk to ANW is foreign exchange risk with Euro, however most analysts feel like the risk of a further collapse between USD and the Euro is an unlikely scenario from current levels.

Research

Thu, 28 May 2015 04:00:00 GMT

Maintaining our long position in ANW

We will maintain our current long position since ANW was able to exceed analyst EPS estimates for Q1 2015 despite experiencing a sharp decrease in sales. We will monitor the stock's price action and see if analyst adjust their opinions on the stock and respected price targets to determine if we need to adjust our stance on this portfolio holding.

On December 23, 2014 we initiated our long position in ANW when shares were trading around $12.50. Roughly a month later on January 26, 2015 we stated we had locked in profits and closed our long position as shares were trading in the low to mid $14 level. On March 18, 2015 we mentioned that we hoped ANW ($13.87) would pullback so that we could once again build a position. On March 20, 2015 we stated due to meaningful price target raises by several analyst we would nibble at shares and add if a pulled back occurred. Yesterday, ANW reported Q1 2015 results:

· Sales for Q1 2015 of $1.01 billion vs $1.69 billion in the prior year and below analyst estimates of $1.37 billion

· EPS for Q1 2015 were $0.25 vs $0.11 in the prior year and ahead of analyst estimates of $0.24.

The sharp decline in sales was mainly attributed to lower oil prices. Comments from management in the Q1 press release:

“Looking ahead, we are confident in our ability to capitalize on the anticipated market recovery and achieve even greater results, while continuing to return value to our shareholders."

We listened to the conference call, here are some of our takeaways:

· Markets they serve are strong

· The company continues to manage operating expenses during volatile oil prices so that it can continue to meaningfully grow earnings

· The company will soon see full positive impact of recent acquisition

· Analyst appeared to be pleased with April and May sales volume trends. Metric tons for Q1 2015 were 2.9 million and so far April and May combined volumes seem to be about 2 million.

Research

Thu, 26 Mar 2015 04:00:00 GMT

On March 18, 2015 we mentioned that we hoped ANW ($13.87) would pullback so that we could build our position. Here are our last 3 tweets on ANW:

Will be looking to buy ANW again if shares pull back. Year end conference call was bullish. #GeoCallToAction
Decided to nibble at ANW now instead of waiting for pull back as we indicated yesterday. Analyst have meaningfully raised price targets.
GeoTeam adding to ANW more aggressively as shares pull back. Will look to be more aggressive if shares dip under $14. #GeoCallToAction

Recent market weakness has pushed ANW shares to fall below $14.00 after reaching a high of $15.16 on March 19, 2015 after the company reported its Q4 2014 results. We look to continue adding shares barring any negative changes to the ANW story.

Research

Wed, 14 Jan 2015 05:00:00 GMT

In our 12/23/2014 email, we stated that although it is outside our normal microcap universe, we had initiated a long position in Aegean Marine Petroleum Network Inc. (ANW) when the stock was trading at ($12.46), as a stock that could benefit from lower oil prices. Yesterday, the company announced the proposed offering of $40 million convertible senior notes. The stock sold off, losing nearly 13% at its lows. Via tweet, we stated:

“$ANW drop on convertible note offering is overreaction. Only 6% dilution & little change to debt to equity ratio, yet stock down 10%. Loaded”

Today, ANW announced the upsizing of the offering from $40 to $42 million. However, we used $42 million in our calculations as the form FWP filed yesterday morning stated $42 million as aggregate principal amount offered. We feel shares could trend back towards the $14 level once the impact from the convertible note offering is fully digested.

Research

Tue, 23 Dec 2014 05:00:00 GMT

Initiated Long Position in ANW

Although outside our normal microcap universe, we have initiated a long position in Aegean Marine Petroleum Network Inc. (ANW) ($12.46). Here are our reasons for tracking the company:

Lower oil prices are not bad for all companies with exposure to the oil industry. We think this is one of those examples, as indicated by the recent stock chart which has been on a steady uptick as oil prices have come down.
Many of the company’s customers which include container ships, drybulk carriers, cruise ships and marine fuel traders will benefit from lower oil prices.
Since the company also uses its own vessels to deliver its fuels to its customers it should also show a reduction in operating cost (reduction in margins)
The company has seen steady growth in EPS since 2011, a trend analysts think will continue through 2015.
We think the stock can trade at a PE of 15 on 2015 analysts EPS estimates of $1.08 or $16.20. In general, if the drop in oil prices is a result of political/strategic supply games brought on by OPEC and not from a weak economy, the company should benefit from the current environment.
Just this morning Stifel Nicolaus raised ANW’s price target to $16 from $14.

Caveat from filings:

“Changes in the market price of petroleum may increase our credit losses, reduce our liquidity and decrease our profitability. Unanticipated changes in the price of oil and gas may negatively affect our business. A rapid decline in fuel prices could decrease our profitability because if we were to purchase inventory when fuel prices are high without having a corresponding sales contract in place, we may not be able to resell it at a profit. Conversely, increases in fuel prices can adversely affect our customers' businesses, and consequently increase our credit losses. Increases in fuel prices could also affect the credit limits extended to us by our suppliers and our working capital requirements, potentially affecting our liquidity and profitability. In addition, increases in oil prices will make it more difficult for our customers to operate and could reduce demand for our services.”

Reasons For Tracking

Tue, 23 Dec 2014 05:00:00 GMT

Initiated Long Position in ANW

Although outside our normal microcap universe, we have initiated a long position in Aegean Marine Petroleum Network Inc. (ANW) ($12.46). Here are our reasons for tracking the company:

Lower oil prices are not bad for all companies with exposure to the oil industry. We think this is one of those examples, as indicated by the recent stock chart which has been on a steady uptick as oil prices have come down.
Many of the company’s customers which include container ships, drybulk carriers, cruise ships and marine fuel traders will benefit from lower oil prices.
Since the company also uses its own vessels to deliver its fuels to its customers it should also show a reduction in operating cost (reduction in margins)
The company has seen steady growth in EPS since 2011, a trend analysts think will continue through 2015.
We think the stock can trade at a PE of 15 on 2015 analysts EPS estimates of $1.08 or $16.20. In general, if the drop in oil prices is a result of political/strategic supply games brought on by OPEC and not from a weak economy, the company should benefit from the current environment.
Just this morning Stifel Nicolaus raised ANW’s price target to $16 from $14.

Caveat from filings: