Thu 24 Oct 2013, 07:51 GMT

World Fuel Services: A thesis for growth


Stock market veteran highlights potential growth opportunity.



Stock market expert, Charles (Chuck) C. Carnevale, says that there exists 'a thesis for growth' for marine, aviation and land fuel specialist, World Fuel Services, in the long term.

Carnevale, creator of F.A.S.T. Graphs and a member of the securities industry since 1970, points out in a recent article that the world's population is expected to grow by 25 percent to 9 billion people by 2040. Over this period, fuel demand is forecast to increase by 90 percent and 75 percent respectively for marine and aviation.

In the article, World Fuel Services is estimated to currently have around 12 percent of the global marine market with total sales of 26 million tonnes in 2012. The company's share of the aviation market is said to be around 6 percent, whilst land fuel sales are estimated to be less than 1 percent of the global market share in this area.

"By no means does World Fuel Services have a monopoly. In turn, these current market shares could provide the company with a bit of a growth opportunity," Carnevale points out.

Currently, the marine segment provides approximately a third of the company's profits via the sale of fuel, lubricants, consulting and yacht services to clients in ports worldwide. The aviation segment contributes about two-fifths of the company's profit. A quarter comes from the land segment, supplying over 3 billion gallons of fuel product per year in Brazil, the United Kingdom and the United States.

Carnevale highlights the fact that World Fuel Services has experienced 15 years of growth. It has grown earnings at a compound rate of 16 percent since 1999, resulting in a $2.8 billion dollar market cap. However, the article also cites the recent train derailment in Quebec to point out that there exists the potential for future lawsuits, adding that "the price of fuel is volatile at best and World Fuel Services' growth has slowed as of late".


Tangier Maersk vessel. Maersk completes first US ethanol bunkering of a deep-sea container ship  

Shipper tests US-produced corn ethanol as a marine fuel aboard the Tangier Maersk.

CMA CGM Alceste naming ceremony. CMA CGM names methanol-powered vessel after Molière’s Alceste  

Ship features a MAN B&W 8G85ME two-stroke engine configured to run on conventional marine fuel and methanol.

Cutaway illustration of a battery-electric ship. Why batteries still cannot power ships across oceans  

Battery-electric ships dominate short-sea routes, but energy-density and infrastructure constraints keep deep-sea propulsion out of reach.

VPS logo. VPS to run marine fuel management course in Singapore  

Two-day programme in November covers fuel handling, testing and decarbonisation rules, including a laboratory tour.

Rio de Janeiro aerial view. Petrobras launches HSFO bunker sales in Rio de Janeiro  

Brazilian supplier begins prompt HSFO deliveries in Rio, pricing the fuel more than $80 per tonne below VLSFO.

Launching ceremony of MSC Alina X. Changhong International launches eighth LNG dual-fuel container ship for MSC  

10,300-TEU vessel is designed to meet ammonia- and methanol-ready specifications.

Kokuryu Maru vessel. Japan completes first methanol-fuelled coastal vessel and conducts inaugural bunkering  

Mitsubishi Gas Chemical, Kokuka Sangyo and Hanshin Diesel Works mark the completion of methanol-fuelled chemical tanker Kokuryu Maru.

Eleven Energy logo. Eleven Energy recruiting trader for new Singapore office  

Saudi bunkering firm looking to hire in Asian city-state ahead of planned January 2027 start date.

Singapore skyline. VPS advertises for bunker surveyor role in Singapore  

Testing and inspection firm seeks candidate to conduct bunker fuel surveys under Singapore Standards SS 648 and SS 600.

RCL vessels naming ceremony. RCL names first three of eight dual-fuel-ready 4,488-TEU vessels in China  

Regional Container Lines takes delivery of Anitta Bhum on day of naming ceremony.