Hard to say whether analysts want to be associated with a $4 stock. Really the key will be the conf call, how people perceive the green CEO, and what kind of numbers are associated with the technical and commercial management arrangement. Year over year the TNK earning headline will scream "increased by 25%", but Q1 to Q2 not so hot. How the CEO describes Q3 bookings will be important. In the commentary I pasted, look at the Afra WS rates. TNK is more sensitive to Afra, less weight equals less bunker fuel burned. Whenever an Afra is earning or exceeding a Suez they are making healthy cash.
Suezmax and aframax spot rates have shot to a six-month high after sharp climbs over the past week.
Suezmaxes are commanding around $44,000 per day on the spot market right now, according to Jefferies.
Clarksons says tight tonnage levels in West Africa and maintenance work at the port of Trieste, which has lifted congestion, have both aided the market.
The present rates compare with the year-to-date average of $24,564 daily for spot-trading suezmaxes, according to Clarksons.
Aframax rates were almost level with suezmaxes at $43,000 daily after rising by over 140% last week, Jefferies says.
This compares with their $22,580 per day average in 2014, Clarksons data shows.
“In the Baltic, a significant tightening of available tonnage saw the rate to the UK Continent nearly double to WS 135, while the rate cross-UKC surged to WS 175,” Clarksons said.
Doug Mavrinac, Jefferies shipping analyst, said in his weekly report: “We believe that crude oil tanker rates should remain strong in the coming months due to positive seasonal demand factors and improving underlying supply/demand fundamentals.”
laker - you sound level headed. I never trust management's forward looking statements, especially for a struggling company. Who do I trust? Google, Apple, Altria, JNJ. Why? They don't need to sell their story.
I was once invested in a small cap, and knew the management, had met the CEO and CFO. They themselves believe their stories. I sold somewhere around $18, the stock now trades around $2. They weren't lying per se, they just had unbridled optimism. It goes with the job.
TNK is making a guess based on their, as quantuon would say, proprietary research, as related to supply/demand. But they don't really know. Earlier this year Afras surged. Why? Some Afras thought to be dirty had been converted to clean, thereby creating an unexpected shortage of dirty tankers. Did TNK see this coming and predict it? No.
At present, and this upsets the TNK longs, the market is not seeing a rosy picture. It is was, TNK would pop higher, as the smart money gets in before the hockeystick, and then sells when main street jumps on the wagon. For every kosmiccharley, there's the other side. So who's right? Look at the share price. Next cc will be interesting as it will give a glimpse of the Taurus pool, and the new entity. But if they don't impress in a big way, then this thing trades at $4 or below for quite some time.
laker - "Teekay is saying". They don't know. Blackberry said the iphone was no threat. Companies can and will make wrong guesses. Look a the fleet - look at those not on charter. If looking at LR2, consider those as Aframax ships (which they are).
thanks laker. But ... it doesn't really matter where the ships on a fixed charter are located, it's the ships capitalizing on spot rates that will make the difference to TNK. At present there are 8 suezmax ships on spot, which is a good thing if looking at suez rates.
I think the Helga Spirit afra comes off of charter in the next several weeks.
Q4 will see two suezmax, and two more aframax coming off of charter. Then early Q1 of 2015, two more Aframax will come off of charter. If my math is correct, by the end of Q1 2015, TNK could have 75% of their ships in the spot market, 25% on charter. If that plays out, and if Suez and Afra rates can stay around 20K-25K per day, then TNK will rake in a considerable amount of cash. If rates crash, so will TNK.
yes, that is the real question. History tell us some sectors do not recover. Someone told me there used to be steel mills in Penn. Really?
careful fin, you will insult the longs who love TNK. I too wonder about a recovery. I would be surprised if TNK ever got to $6. One troubling piece of data is the fact that a year ago TNK was trading at $3. If you look at the rs platou shipping rates data (quant's favorite source), the YTD figures for VLCC, suez, and Afra are close to double what they were running in 2013. And most who watch this sector will tell you Q3 is often very poor. Yet Q3 is looking healthy. Thus with a fair amount of data pointing to some form of a recovery, and all the chatter about fewer ships hitting the water, and supply/demand fundamentals improving, the share price of both NAT and TNK are underperforming the market by a long shot. It's rare that the market can't spot upside ... the geniuses on yahoo chat boards can't match the big money, which has data no yahoo-boy will ever see. And the big money is ignoring this sector.
A "lil unrest" is not what shippers need. They need an appetite for oil from hungry consumers such as those in India and China. In 2008, shippers went to the moon on the theory that emerging economies would drink oil. Here we are, 6 years later. Every sector has recovered, and blasted higher. But not crude shippers.
If you like ships, look t the companies that move compressed/cooled gas.
OK so according the today's news, they took delivery of one, with a sister ship due August. Were you considering one or two, i.e., was one already baked in?
On the passenger jet. Does it fall into the category of a "lil unrest"? And thus in the words of Quant, would it be proper to say "God bless a lil unrest" as he did? I mean, it's just a life, or lives, right doug?
Yep, especially for this time of the year, caveat being the Intertanko data you cite is one route only. You can locate TNK's ships by poking around. Quantuon used to like doing this, but then he got upset.
laker is somewhat new to TNK, but he's been around. He suggested I go short, although tongue in cheek. Suez spot approaching 50K caught my eye, plain and simple. Afra and MR still horrible.
Q2 not very solid, but Q3 could be meaningful if these suzie rates hold. Good luck Charly, no harm intended.
3 posts within 9 minutes of each other. A busy charly indeed! Oh, and it's her funnel, remember? She has one for the road, one for home.
phul, what causes suzie rates to be double that of a VLCC as reported on Intertanko, seems totally upside down. 1/2 the size, double the rate. What gives?
Suzies at 48k per day look attractive to me, although illogical whenever a ship 1/2 the capacity of a VLCC trades for more than double. So going long means I can share sandwiches and fruit punch with my investing brethren ... this might just be fun! However, I prefer the punch through a straw as opposed to a funnel. Go TNK, go!
Sentiment: Strong Buy
This is kind of cool, I don't even have to bother posting. I see this as benefit, because now I can return to my thesis, which has a working title of "How a single yahoo poster can influence the share price of a publicly traded stock". It may end up being a seminal work in the study of investor behavior, and I will consider it my gift to future MBA students and academics alike. Of course, in the acknowledgments, I will express my gratitude to doug, charley, and the most esteemed dark-pool sherrif, pb_harris. I must go now, I need a little (un)rest.