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Nordic American Tankers Limited Message Board

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  • post_looks_10a_brass post_looks_10a_brass Feb 23, 2006 8:30 AM Flag

    *****what a sleeper*****

    Maybe the solid dividend payout got the attention of a lot of income investors recently, but...

    I'm concerned about the impact of the high oil inventories in the US (left over from mild winter?) on near-term tanker rates.

    If I'm not mistaken, the second calendar quarter usually sees a downturn in rates, which might compound the situation... Johnny-come-latelies who bought recently might become alarmed and sell off, not realizing that the rates tend to be seasonal, and that the industry has a cyclical history.

    SuezMax daily rates just dropped to the $40K's from the $60K's in a few days. I don't do technical charting, but my guess is that the market psychology will not permit a solid base at this level for much longer, even if this stock can easily beat the long bond at $30K/day.

    imo.

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    • Thanks for the input. I will consider your points.
      Just a tidbit about the oil inventory issue, in case it is not common knowledge.
      Refineries produce 2 different types of fuel for our vehicles, one for winter and one for summer (different emmission ratings). The shortage in refineries means they only produce one or the other depending on the season.
      Winter months bring extra demand due to heating oil and winter grade fuel consumption.
      Refineries will be shutting down briefly this Qtr. to make the switch-over in order to begin refining fuel for the summer. There is a strong demand in Q1 & Q2 for this reason. It is Q3 that there is a huge lull.

      No real secret I know, but watching this annual cycle compared to NAT's chart shows that this stock was heavily sold well into the end of last year. I am used to seeing a run-up beginning in Nov. in anticipation of this cycle.
      Last year was the first for NAT on NYSE so perhaps that led to an overbought position, but I think/feel that it has since been grossly oversold without any real response for
      a record qtr. Compare P/E for Q4 for the past 3 years...
      I guess I'm just a hopeful fool, but I'm holding steady for another month (I think).
      Thanks again for your reply

      • 1 Reply to tom8yours
      • Just when it gets easy to predict a stock; thats when the dam breaks. However, I agree this is undervalued relative to historical data , and current fundamentals.

        I bought this for the short term in NOV and holding for 39., the best surprise are the great dividend returns; on annual basis beats most vehicles today. Suez spot market much stronger than estimated by the so called experts who downgraded this sector for the next few years.

        I guess you can call me a counter call investor.

 
NAT
10.12-0.19(-1.84%)Jan 30 4:03 PMEST

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