Dorian LPG Ltd (LPG): In A Sweet Spot

SUMMARY

• Very Large Gas Carriers transport ethane, natural gas and LPG. There are several companies that operate these VLGC vessels as part of global oil & gas trade.
• But the industry has witnessed very bad performance in the last 2-3 years with spot prices dipping to all time lows. Dorian LPG is one such carrier which had to register loss in the period.
• However, the conditions have changed to open an arbitrage window as US LPG is price competitive even with shipping costs included.
• Spot prices for VLGCs have climbed to $60,000 per day, a multi-year high and multi-fold rise from the lows in the last fall.
• The stock has already witnessed ~90% rally but there is still significant juice left.

Q2 hedge...