This Little Known Small Cap Is Up 139%: Is The Stock A Buy?

• Marine energy transporter International Seaways has posted double- and triple-digit returns while the market has been correcting 

• Revenue growth accelerated in the past two quarters, and analysts see strong earnings in the third quarter

• The company raised its dividend earlier this year

It is not very common to find a stock like International Seaways.

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• 1 month: +17.69%
• 3 month: +62.69%
• Year-to-date: +139.17%

The company is based in New York It's part of the energy sector.

Product carriers are vessels that carry products and crude tanker are vessels that carry crude oil. The refined products are shipped to ports by smaller product tanker.

This is a small company with a market cap of over $1 billion. Smaller companies can be more volatile than larger ones. It can be a good thing for investors when the volatility occurs to the upside.

Because of the small number of shares, there is not the kind of active price movement you can see in a larger stock. The price of International Seaways can remain stagnant for minutes while the price of Enterprise Partners moves every few seconds. It is simply a factor of institutional ownership and cash flow.

Smaller stocks can deliver outsized returns if you look into them. Small caps can sometimes beat larger stocks. There are several reasons why the asset classes differ in appreciation rates. Most of the time, that doesn't matter, but be aware of the possibility of a problem.

Growth Is Accelerating

International Seaways reported its second quarter on August 9, and the stock has risen since then.

In the past few quarters, the company has suffered losses, but revenue grew in the past two quarters.

The company is expected to earn $1.95 per share in the third quarter, on revenue of $2149.2 million.

International Seaways and Diamond S Shipping merged a year ago. The combined company had over 100 vessels, making it the largest U.S.- listed tanker company. The company is growing because of global demand for energy. International Seaways CEO Lois Zabrocky said in an interview with CEO Magazine that the company invests in its own infrastructure during down markets to increase its readiness for boom times.

Wall Street Has Conviction 

The consensus rating on the stock is a buy. Many good-performing stocks have the qualification of being moderate buy.

In 2016 the company became public. Many small caps pay dividends. Other small companies that are involved in energy transportation return dividends to shareholders.

International Seaways started paying dividends in 2020. The quarterly payment was increased to $0.12 per share, from $0.06 per share, yielding 1.03%.

Is this stock ready for some selling in the near term because of all the positives?

There is a chance that it is possible. There is no current price-to- earnings ratio because the company has a loss. The steep price appreciation is a sign that institutions are prepared to make some money.

The stock has found support above its 21-day moving average since September 20, but it has been stagnant since then.

It doesn't mean a fresh rally won't happen soon, but don't be shocked if the stock pulls back in the near term, as is typical after an exceptional rally