Shares of Nordic American Tankers Ltd (NYSE: NAT) jumped as much as 12.7% in trading Thursday after oil tankers were attacked in the Middle East. At 3:50 p.m. EDT, shares were still up 11.8%.
Two oil tankers were attacked in the Gulf of Oman, near the Strait of Hormuz, where one-third of the world's shipped oil travels. The attack sent oil prices higher, climbing more than 2% near the end of trading.
Image source: Getty Images.
The attack sent investors in a mission to find companies that may benefit from rising oil prices or changes in energy markets. That's what sent shares higher today, not any fundamental change in the business.
It's not at all clear that revenue or earnings for companies like Nordic American Tanker will rise because of this incident. I would pay more attention to the company's current net losses and the weak net margins currently being generated. I don't see a tanker attack as a long-term bullish sign and, despite the surge in shares today, I don't think this is a buying opportunity for long-term investors.
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