Capital won big on election day.

Lower tax rates and the end of the debate for capital gains taxes on unrealized income will help support stock markets.

Inflation will continue to simmer, but lower deficits that could result from Elon’s DOGE (Department of Government Efficiency) will put downward pressure on rates as less borrowing means less crowding out of private capital.

Plus, the uncertainty meter went way down.

Global hot spots like Ukraine and the Middle East could find swift resolution in the coming months (unless Biden baits Russia into WWIII). Iran has agreed to stop enriching uranium to weapons grade. China is scrambling to meet with Trump’s team.

And, with energy policy shifting from Green Dreams to Oil and Gas Reality, U.S. energy supplies could find stiff market demand for oil and natural gas. Especially given that the EU intends to replace Russian natural gas with U.S. LNG.

That shift in attitude creates an opportunity to buy downtrodden energy stocks, including companies positioned to export American energy products to the rest of the world.

From Fear to Greed

Headquartered in Stamford, Connecticut, Dorian LPG Ltd. (NYSE: LPG) ships liquefied petroleum gas (LPG) with its fleet of very large gas carriers (VLGCs).

The stock hit a peak price of $49.66 in May but has since pulled back nearly 50%.

Source: ThinkorSwim

Shipping rates have decreased dramatically over the past year as the global tension meter peaked.

Source: https://www.avancegas.com/freight-rates 

The decline in rates drove a steep decline in revenue growth. But those rates should reverse with the world ready to do business with the U.S. and energy sanity replacing green madness.

Despite the steep sales decline, Dorian has maintained high competitive profit margins well above those of other oil and gas transportation companies.

Those margins, plus the company’s high free cash flow and a solid 16% return on capital, put the company in a great position to capitalize once shipping rates turn favorable.

Maintaining high profitability throughout its sharp stock price sell-off means the current $25 stock price represents a steep discount to its oil and gas peers.

Dorian LPG is priced to perform. And I’ll detail the opportunity this discounted pricing represents in my next Capital InFocus report.

Stay tuned.

Think Free. Be Free.

Don Yocham, CFA

Managing Editor of The Capital List