TNK saw best tanker rates since 2008.their suezmax rates averaged $26.6k in 4th qtr and $39k so far in the 1st qtr, FRO will also have good earnings and guidance. This was from TNK earning report.
"The decline in oil prices has further strengthened the crude spot tanker market due to the strategic and commercial stockpiling of oil, higher refinery throughput, and the development of a contango oil price structure that has recently encouraged floating storage. Based on approximately 60 percent of spot revenues days booked to-date in the first quarter of 2015, the Company has earned average time-charter equivalent, or TCE, rates of approximately $39,000 and $30,000 per day for its spot-traded Suezmax and Aframax vessels, respectively, compared to $26,600 and $25,700 per day for the fourth quarter of 2014."
This is from one rating agency, this is what they use for their price target.:
"Price Target: (12 months) for Frontline (FRO.N)
Method: Our $2 target price is based on a DCF analysis which forecasts cash flows in the near term and uses mid-cycle tanker rates in the long term. We use a $35K/day VLCC normalized day rate at 1.5% growth rate and a WACC of 5.5%. "
I think the VLCC rates have been much higher than $35K/day VLCC, so their target price should be much higher.
Fixed my chart problem. I had my browser set to compatibility view for Yahoo. That was causing the problem. GO FRO!!
JF is still the largest shareholder and he loves dividends. When they resolve the debt issues, and with these great spot rates they are getting, you know JF will once again declare regular dividends. I remember the good ole days when they paid killer dividends.
Sep 2, 2008 3.00 Dividend
Jun 2, 2008 2.75 Dividend
Mar 14, 2008 0.34 Dividend
Feb 22, 2008 2.00 Dividend
Nov 26, 2007 1.50 Dividend
Oct 10, 2007 3.25 Dividend
Jun 6, 2007 1.50 Dividend
Mar 6, 2007 4.744 Dividend
Dec 5, 2006 2.50 Dividend
With current rates as high as they are FRO should make great profits this quarter.
(from FRO website)
Estimated Cash cost breakeven rates for the remainder of 2014 ($/day)
VLCC $22,900 Suezmax $18,100
2015 will be a good year to be long on FRO
"Platou: Golden 2015 ahead for tankers
Tanker: Tanker rates look set to become the biggest bright spot in international shipping in 2015, a year that could develop into a new nightmare for the dry bulk carriers, says Platou Markets
I wonder how many tankers FRO is using for storage and how many they are saving for the soon to be much higher spot market?.
" Time charter rates are subject to market demand and increase if tanker availability gets tight. Estimates by Reuters and the Wall Street Journal indicate that up to 30 MMBbl of tanker space is being used for floating storage. One strategy is to charter older “unwanted” tankers for floating storage to get a lower daily rate – the shipping equivalent of renting a clunker to save money."