Why Shares of Aegean Marine Petroleum Network, Inc. Jumped Today

By Markets Fool.com


A booming global shipping industry needs fuel to succeed. Image source: Getty Images.

Continue Reading Below

What happened

The past few days have seen a massive rise in the market capitalizations of oil shipping stocks, container shipping stocks, and dry bulk carriers -- mostly tied to gains in the Baltic Dry Index (BDI). Today, we saw a tack-on effect as shares of Aegean Marine Petroleum Network Inc. (NYSE: ANW) took off as well. As of 12:30 p.m. EST, Aegean Marine Petroleum stock was up 9.3%.

So what

Not a shipper itself, Aegean Marine Petroleum supplies-- surprise! -- petroleum fuel to power ocean-going vessels run by other operators. And it turns out to be a pretty nice business to be in.

Yesterday, Aegean Marine reported its fiscal third-quarter 2016 earnings, showing revenue up 5.4% year over year, and earnings per diluted share up 57%!

Continue Reading Below

Now what

How'd it do that? While cost of revenue grew in tandem with revenue, Aegean made good progress in whittling away at its selling and distribution costs, with the result that operating profits jumped 27%. Higher taxes, offset by lower financing costs, resulted in the even bigger win on the bottom line.

As for what happens next, Aegean Marine President E. Nikolas Tavlarios noted that he's still seeing "slowness" among containership traffic. On the other hand, continued strength on the BDI (now sitting at 1,145, and up 26% since the election) suggests dry bulk traffic could be growing again soon, requiring more fuel to power it -- and powering Aegean Marine's profits in the process.

Forget the 2016 Election: 10 stocks we like better than Aegean Marine Petroleum Network
Donald Trump was just elected president, and volatility is up. But here's why you should ignore the election:

Investing geniuses Tom and David Gardner have spent a long time beating the market no matter who's in the White House. In fact, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Aegean Marine Petroleum Network wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 7, 2016

Fool contributorRich Smithdoes not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he currently ranks No. 314 out of more than 75,000 rated members.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.