Growth stock Frontline is in a large cup base with a buy point of 19.29, according to IBD MarketSmith. Shares gapped higher for a 2% gain on Thursday after second-quarter earnings. FRO stock is today's selection for IBD 50 Stocks To Watch.
The stock has a Composite Rating of 98, with an EPS Rating of 81 and Relative Strength Rating of 95.
Sales growth has been steady for the past seven quarters while earnings growth over the five most recent quarters show the company returning to profitability from prior quarters.
Second-quarter sales grew 71% to $512.8 million while earnings per share of 94 cents surged from 20 cents in the prior year-period.
Tanker demand saw little impact from a voluntary OPEC+ cut, thanks in part to Europe and Atlantic Basin exports and high imports from Asia. Nonetheless, oil prices remained under pressure as global inventory grew throughout the quarter.
During the quarter, Frontline realized net cash of $28.2 million from the sale of a VLCC tanker. The company ended the quarter with $719 million in cash and cash equivalents.
The company realized profits of $230.7 million, which was the highest since 2008, allowing the company to distribute a cash dividend of 80 cents per share.
For the third quarter, Frontline expects a lower time charter equivalent, which is a way of calculating net revenue per day after expenses for its vessels.
Frontline operates oil tankers and has a total of 66 vessels across three segments: very large crude carriers (VLCC), the medium-size Suezmax and the smaller LR2/Aframax.
Growth Stock Holds Second Place In Group
The stock ranks No. 2 in the Oil Transportation and Pipeline group. Its Accumulation/Distribution Rating of B+ shows strong interest from mutual funds.
The growth stock has gained 50% so far this year, outperforming the S&P 500's returns of 16%. FRO stock is listed on both the New York Stock Exchange and the Oslo Stock Exchange under the same ticker.
Several sector exchange traded funds hold shares of Frontline. The Invesco Dynamic Oil & Gas Services ETF and the SPDR S&P Global Infrastructure ETF hold shares of FRO stock.
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