Yahoo Finance Bull of the Day: Global Partners (GLP)
Global Partners (GLP) is a Zacks Rank #1 (Strong Buy) that is an adaptive distribution energy company. Global Partner’s focus is to source low-cost energy in bulk and then transport products through its vertically integrated adaptive distribution network to wholesale, commercial and retail customers.
Despite the recent pullback in crude oil, the stock is trading just under its 2022 highs. The relative strength in the name is very evident, which signals further gains in 2023. Additionally, a recent earnings report and surging earnings estimates is bringing more attention to the name.
More about GLP
Global Partners was incorporated in 2005 and is headquartered in Waltham, MA. The company focuses on the regions of New England, New York and the Mid-Atlantic. Global employs over 2400 people and has a market cap of $1.1 Billion.
The company has its hand in all aspects of the energy markets. They purchase, sell, gather, blend, store, and transport gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers.
The stock has a Zacks Style Score of “A” in Growth, Momentum and Value. Global Partners currently pays a 7.5% dividend.
Earnings Momentum
On November 4th, GLP reported a 135% EPS beat for Q3. Earnings came in at $3.12 v the $0.86 a year ago. Revenues came in at $4.3 billion v the $3.32 billion last year. EBITDA climbed to $168.5M from $79.2M last year.
The Gasoline Distribution and Station Operations segment performed well in Q3. The company saw increased activity at its convenience stores and higher retail fuel margins year-over-year.
Management commented that the for the Wholesale segment, fuel inventory was managed effectively despite sustained backwardation in the gasoline and distillates markets. They added that the Commercial segment saw a year-over-year increase in bunkering activity.
The earnings beat was the fifth in a row and the eighth out of the last ten quarters. Since that streak begun, the stock is up over 130%.
Estimates Rising
After the big earnings report, analysts started to take estimates higher across all time frames.
For the current quarter, numbers have been taken 197% higher over the last 60 days, from $0.47 to $1.40. For the current year, they have gone from $7.17 to $9.88, a 38% rise, over that same time frame
This is a steady improvement that will continue into next year. Over the last 60 days, next year’s numbers have gone from $2.91 to $3.20.
The Technical Take
The relative strength in the name as crude oil prices head lower is telling. Investors are buying this name and anticipate the stock is heading back to the 2014 all-time highs of $45.75.
For those looking to buy pullbacks, the moving averages have been fairly reliable. While the 200-day MA has cracked twice, the bulls reclaimed that level and the stock continues its march higher. The 50-day has been holding since October and the 21-day MA has been short-term support for a majority of November.
The current 200-day is just under $28 and would likely find support it markets sold off. The 50-day $30.50 is one to watch for really bullish investors as the stock might be too strong to see a big sell off below the $30 level.
Upside Fibonacci targets drawn from the COVID sell off are $41.25 and $62.50
In Summary
Global Partners offers investors an opportunity to get that energy exposure and get paid a hefty dividend. The company has posted consecutive quarters of strong cash flows and is looking to increase its scale through acquisitions.
In 2022, stocks showing relative strength typically go on to outperform the market. There is no reason to think that 2023 will be any different and being invested in the energy space will likely continue to reap rewards.
Look for GLP to close out the year strong and be a top performer in 2023.
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Global Partners LP (GLP) : Free Stock Analysis Report
