With respect to the entire shipping universe, including the tankers, the whole lot are trading in the same fashion as the homebuilders throughout the late 90's. All the boards are harping the same lament. Namely, why is this stock down when the fundamentals are so good? Well, my own two cents are based in how Wall Street operates. First the next three quarters worth of comparisions will look bad. Second, the analysts are divided about world GNP growth next year. Oil prices have peaked, it would appear. This is rightly or wrongly attached to the price movements of tanker stocks recently. In a nutshell, earnings GROWTH matters on Wall Street. Look no further than GOOG for proof. Also, we are in tax selling season for mutual funds(ending October31) as well as weak retail stock holders who cave when the wind shifts. Bottom line, like the homebuilders, this group will continue to pump out profits, high dividends and buy back shares. With patience this group will come back into vogue when the earning comp's look better. In the meantime, accept that this group is out of favor and wait.
I agree with your thoughts. I bought in for the dividend and the future growth. This is actually a very good time to pick up some more TNP. It seems to be a very well run company with a good executable plan. They have a nice mix of contract charters and spot charters. I believe the stock will do well in the next 2 years. It may go sideways for awhile, but we have decent dividend while we wait.
It's hard to believe now, but 4 years ago I started to buy the undervalued and under appreciated energy MLP's. They had good fundamentals, they paid dividends of 10%, they had very transparent accounting, AND management was either buying shares or had a big stake in the companies. Sound familiar? This is what attracted me recently to this sector. The MPL's also had a dividend policy of increasing dividends yearly, some by 10% per year. This continues today, with companies like KMP, EPD, MMP and others. Once that sector appeared on the analysts radar screens as energy prices increased retail investors followed, pushing share prices higher. The analysts loved the earnings growth story. The comparisons improved and the stocks went up.
I believe the lack of earnings growth for this sector will keep the ananlysts at bay for awhile. The exception could be TNP whose comparisons might actually improve when you consider the one time sale of new builds and older tankers that TEN is so good at.
In the meantime, the company believes the shares are undervalued; they set a poison pill. They also keep buying back shares. They continue to raise the dividend, although I wish they would copy the MLP's and state a goal of increasing this amount by 10% or so per year. Also on my wish list for the dividend buyers like myself would be a change to quarterly dividends from the current semi-annual payments
I find that many people who post on message boards assume that when a stock or industry is under price pressure that they should exit. In fact, the share buy backs of TNP, OMM, QMAR(insiders) and others, tells me now is the time to buy......and have patience.