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Teekay Tankers Ltd. Message Board

  • nadsmis nadsmis Dec 19, 2013 1:20 PM Flag

    wondering, should i return?

    i exited TNK at 2.50 PPS and broke even. revisiting, i find shares at 3.47. wow. this could be another NOK story for me. that is a 26% gain i lost out on.

    what gives? why the run up?

    wish i had stayed a wee bit longer. that darn itchy trigger finger...

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    • mad - there's something broken at TNK, but management is not forthcoming. Intertanko lists the annual average rates for the 3 classes of ships that TNK sails. But if we isolate on only the Aframax and Suezmax, you'll find that the average annual rates in 2013 are exceeding the rates of 2012 and 2011. Suez is a bit behind but will surpass soon, and Afra is already ahead of both years. So in the aggregate, we have a better rate environment in 2013 than was seen in 2012, or 2011.

      Dividends are a function of how much cash is earned via the shipping rates. So it's logical to assume 2013's dividend would be similar to 2012, or 2011, correct? Lets take a look:

      2013 annual dividend: 12 cents
      2012 annual dividend: 40 cents
      2011 annual dividend: 83 cents

      To further compound the lunacy of the 2013 dividend, TNK has fixed charter revenue from a joint venture VLCC that was not in the 2012 or 2011 cash available for distribution.. And, due to a months of surging vlcc rates, TNK is getting and additional cash windfall from profit sharing on that ship alone. Yet not a word from the company.

      TNK has two other VLCCs making a higher spot than anything seen in 3 years. See anything wrong? TNK blundered in early 2013 when they fixed the dividend at 3 cents, coming off of a 2 cent dividend the previous panic quarter. Had they not fixed it, we'd be looking at an annual payout looking more similar to 2012. As such, the market is discounting TNK. Look at the surge in NAT and FRO today, and compare to TNK.

      My take is the street has lost confidence in management. They obscured that fact that they foreclosed on a ship that had no chance of sailing, and sits dead in the water 9 months after it was seized. Well, not actually dead, it is literally sailing in circles, thus burning some bunker fuel. They ordered product tankers from an unstable yard, and now they are threatening to sue a bankrupt entity. What's next?

3.83-0.04(-1.03%)Apr 23 4:02 PMEDT

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