Energy penny stocks are back in focus as some interesting news takes center stage. A few days ago, reports came in that the Colonial Pipeline had been shut down by a ransomware attack from the hacker group called DarkSide. While this likely won’t have a long term effect on these penny stocks, it’s definitely worth noting. This pipeline supplies around 45% of the Eastern Seaboard with fuel. And its shutdown has resulted in a few states declaring a state of emergency.
And while this likely won’t affect energy penny stocks in the long term, right now many investors are wondering which oil and gas penny stocks may benefit. When any event happens be it big or small, investors that can think outside of the box are the ones who stand to gain the most.
So, if we consider the classic supply and demand concept, this pipeline shutdown could lead to increased values for certain penny stocks to watch. As of mid-week, we are not seeing a major amount of momentum in the energy industry resulting from this event.
However, it’s difficult to tell how long it will last. It’s worth noting that there is no real shortage right now, however it has resulted in a lot of panic buying from consumers. This panic buying is the result of fear rather than any lack of fuel.
Because of this, finding the best energy penny stocks to buy in this situation, could be a valuable position. With that in mind, let’s take a look at a few that could benefit.
1. Vertex Energy Inc. (NASDAQ: VTNR)
Vertex Energy is a producer and refiner of petroleum products. While it isn’t necessarily a pure-play oil and gas stock, it does work in the production of motor oil and hydro-processing. It is considered to be one of the largest processors of motor oil in the U.S. and has several facilities around the country.
Ok so Vertex Energy is not a producer of the gasoline that goes into your car, however, given that it does produce oil in one way or another, it could stand to benefit from a vastly heightened demand.
On May 13th, Vertex reported its Q1 2021 financial results. In the results, it posted a net income of $1 million with an adjusted EBITDA of $6.5 million. This is a sizable increase of around $4.9 million over the previous quarter. And, the company reported that the price of Group II+ base oils rose by nearly 20% compared to the previous year. This supports its increase in margins during this most recent quarter.
“Our strong first-quarter results which include significant year-over-year growth in gross profit, operating income, and adjusted EBITDA, were driven by a combination of increased product demand, improved margin realization, disciplined expense management, and full optimization of our Marrero and Heartland refineries.”
Benjamin Cowart, CEO of Vertex Energy Inc.
Considering that the pandemic did have a large effect on all oil and gas companies, Vertex has managed to escape relatively unscathed. Considering this, will it be on your list of energy penny stocks to watch?
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