| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 33.47 | 170 |
| Intrinsic value (DCF) | 6.82 | -45 |
| Graham-Dodd Method | 13.62 | 10 |
| Graham Formula | 33.29 | 168 |
Ardmore Shipping Corporation (NYSE: ASC) is a leading global provider of seaborne transportation for petroleum products and chemicals. Headquartered in Pembroke, Bermuda, the company operates a modern fleet of 25 double-hulled product and chemical tankers, serving a diverse clientele including oil majors, traders, and chemical companies. Founded in 2010, Ardmore Shipping has established itself as a key player in the marine shipping industry, leveraging its specialized vessels to meet the growing demand for efficient and environmentally compliant transportation solutions. The company operates in a cyclical but essential sector, benefiting from global trade flows and regional supply-demand imbalances. With a focus on operational efficiency and sustainability, Ardmore Shipping is well-positioned to capitalize on long-term trends in energy and chemical logistics. Its strong balance sheet and disciplined capital allocation further enhance its competitive edge in the industrials sector.
Ardmore Shipping presents an attractive investment opportunity due to its strong financial performance, with $133M net income and $3.06 diluted EPS in its latest fiscal year. The company's low beta (-0.03) suggests defensive characteristics, while its 2.3% dividend yield provides income appeal. Risks include exposure to volatile tanker rates and potential economic slowdowns affecting global trade volumes. However, with manageable debt ($44.2M) and solid operating cash flow ($160.4M), ASC demonstrates financial resilience. The company's modern fleet positions it well for stricter environmental regulations, potentially creating a competitive advantage in an industry facing increasing decarbonization pressures.
Ardmore Shipping competes in the mid-sized product and chemical tanker segment, where its competitive advantage stems from its modern, fuel-efficient fleet averaging just 8 years old. This positions ASC favorably against older fleets facing higher compliance costs with environmental regulations. The company's focus on the MR (Medium Range) tanker segment allows specialization in regional petroleum product trades, where its vessels are optimally sized for most ports. ASC's customer diversification (serving oil majors, traders, and chemical companies) provides revenue stability compared to competitors reliant on single customer segments. The company's Bermuda domicile offers tax efficiencies versus some competitors. However, ASC's smaller scale (25 vessels) limits economies of scale enjoyed by larger competitors like Scorpio Tankers. The company mitigates this through operational excellence, evidenced by its strong margins. ASC's low leverage (debt-to-equity of ~0.11) provides financial flexibility in a capital-intensive industry, allowing opportunistic fleet growth during market downturns when asset prices are depressed.