|Bid||4.5000 x 4000|
|Ask||4.5200 x 3000|
|Day's Range||4.4100 - 4.5500|
|52 Week Range||1.6600 - 9.0000|
|Beta (5Y Monthly)||0.50|
|PE Ratio (TTM)||27.68|
|Earnings Date||Aug 17, 2020|
|Forward Dividend & Yield||0.56 (12.44%)|
|Ex-Dividend Date||May 22, 2020|
|1y Target Est||6.28|
Tanker stocks have a "tree falls in empty woods and no one hears it" problem. They have a compelling longer-term pitch — almost no newbuild contracts, a giant plus for rates — but buyers are looking elsewhere.A new FreightWaves analysis reveals the extent of the slide in trading value and volumes for tanker and dry bulk shares.Tanker stock daily trading values The number of shares traded per day is one indicator of investor interest. To account for widely divergent share prices, the data can be analyzed in terms of dollar value.FreightWaves used data from Yahoo Finance and NASDAQ on the number of shares traded per day, multiplied by the average of the daily high and low price to estimate daily trading value.Data was compiled over a one-year period (July 22, 2019-July 21, 2020) for the seven tanker stocks with the highest market capitalizations: Euronav (NYSE: EURN), Frontline (NYSE: FRO), DHT (NYSE: DHT), Scorpio Tankers (NYSE: STNG), Nordic American Tankers (NAT), Teekay Tankers (NYSE: TNK) and International Seaways (NYSE: INSW).For the full year, Scorpio had the highest average daily trading value: $38 million. International Seaways had the lowest, at just $8 million.NAT blew everyone else away in terms of the annual peak, as retail traders on the Robinhood platform flocked to the stock. Volumes took flight in the wake of NAT CEO Herbjorn Hansson's appearance on Jim Cramer's CNBC show "Mad Money" on April 24.Removing the NAT outlier from the data offers a clearer picture of trading values for the other large tanker owners.Recent daily trading values for the group are averaging about a third of peak levels in April and early May. But on the positive note, daily values are still over double where they were a year ago. Buyer interest in tanker stocks may be down, but it hasn't completely collapsed.Tanker stock daily trading volumes Another way to measure trading liquidity is the number of shares bought and sold. This data removes distortions from share price. FreightWaves used a 10-day trailing average of the number of shares traded, indexed to the first trading day of the year.This data shows that trading in most tanker stocks is back to where it was in early January, with the exception of higher volumes for Frontline and Scorpio.Over the first half of the year, NAT once again far outperformed, with Frontline and Scorpio seeing higher gains in volume than other tanker names.Excluding the NAT outlier, daily volumes for the group are about one-sixth of peak levels in April and early May.FreightWaves also ran the trading-volume numbers indexed to one year ago. The result: Volume is much higher now that it was then, around triple on average (with the caveat that the bar was low). International Seaways once again brought up the rear, with a 56% year-on-year gain.Dry bulk stocks: much worse than tankers The tanker data shows a fall-off in investor interest from the floating-storage-induced highs, but a year-on-year improvement nevertheless. The dry bulk data points to a sector with very little interest from investors — and one that is getting worse.FreightWaves compiled trading data for the five U.S.-listed bulker owners with the largest market caps: Star Bulk (NASDAQ: SBLK), Scorpio Bulkers (NYSE: SALT), Golden Ocean (NASDAQ: GOGL), Genco (NYSE: GNK) and Eagle Bulk (NASDAQ: EGLE).Total daily trading value for the group is down to around half of where it was a year ago. The owner with the most daily trading value, Star Bulk, has seen a significant decline. In contrast, trading in Scorpio Bulkers is up more recently, although price action implies this is because stockholders are selling.The 10-day trailing average of the number of shares traded, indexed to Jan. 2, paints a thoroughly unimpressive picture.Dry bulk trading volumes are flat or down, with the exception of Golden Ocean's. Volume patterns are largely directionless. To the extent volume data shows some rising first-half interest in dry bulk, it also shows interest subsequently fizzling. Click for more FreightWaves/American Shipper articles by Greg Miller MORE ON SHIPPING STOCKS: Why pricing predictions for tanker stocks have become more difficult: see story here. How traders are turning to shipping penny stocks: see story here. A look at tanker and bulker stock pricing trends in the first half: see story here.See more from Benzinga * Landstar Misses Mark In 2Q; Pandemic Bonus Payments The Culprit * CSX's Second-Quarter Net Income Falls 43% * TuSimple revenues fall short(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The tanker sector refuses to follow its script. Rates were supposed to keep on sinking into the summer. They didn't. Rates for very large crude carriers (VLCCs; tankers that carry 2 million barrels of crude oil) have jumped well off recent lows, to nearly double last year's rate.VLCC spot rates have not been this high at this time of year since 2015. And yet, crude-tanker stocks continue to languish.Rates on the rise According to Clarksons Platou Securities, VLCC spot rates averaged $35,500 per day on Thursday, up almost 50% week-on-week. Some individual VLCC spot fixtures in recent days are even higher, near $50,000 a day.Rates for Suezmaxes — tankers that carry 1 million barrels of crude — averaged $14,400 per day, up 32% week-on-week."Rates are not falling to OPEX [operating expense] levels like some predicted," Jefferies analyst Randy Giveans told FreightWaves. OPEX for a VLCC is around $8,000-$10,000 per day and cash breakeven, including debt service, is roughly $25,000 a day, he added."The jury is out on whether the upward spiral will continue, but the summer looks much brighter now than it did a few days ago," said shipping brokerage Fearnleys in its weekly market report.What's driving rates up? Extreme congestion at Chinese unloading terminals is one driver of VLCC rates.Argus Media reported that "most storage tanks around Qingdao port are full. ... The pipeline system is also struggling to cope ... [and] crude is being forced onto the rail system and the roads." In Dongjiakou, it said there are "lengthy queues" for the sole VLCC berth. Given congestion, VLCCs are being rerouted to Tianjin and Ningbo, where cargoes have to be unloaded onto smaller vessels first to dock at berths due to shallow waters.Evercore ISI analyst Jon Chappell (Photo: John Galayda/Marine Money)"China congestion is certainly playing a role but there is never one answer," explained Jon Chappell, analyst at Evercore ISI.He told FreightWaves, "Floating storage levels are still elevated, so when you throw in port congestion, there are logistical issues that distort the actual tradeable fleet."Add the hope that Venezuelan-related sanctions could remove more capacity and owners have a bit more confidence in VLCCs than in other segments. In addition, U.S. exports have remained somewhat elevated," Chappell said.According to Giveans, "Incremental cargoes out of the U.S. and West Africa are helping rates, despite the drop in cargoes out of the Middle East Gulf. Congestion in China is adding to the duration of voyages, which tightens the market."Tanker stocks languish (except one) With the notable exception of Nordic American Tankers Limited (NYSE: NAT), this year's rate strength has yet to translate into equity strength.The floating-storage thesis dates back to early March. Rates began surging after Saudi Arabia opened the spigots after disagreement with Russia. Excess oil supply collided with coronavirus-stricken demand, forcing floating storage that tied up tanker capacity.FreightWaves plotted the stock performance of the top listed crude-tanker owners versus each other as well as compared to the general stock indices from March 2 through Thursday.The tanker stocks were up around 30% on average by late April compared to early March. NAT then completely pulled away from the pack, outperforming the others by roughly 50%-70%. As of Thursday, NAT was up 33% from March 2 while other tanker stocks were down on average by 16%.The other stocks are: DHT Holdings, Inc. (NYSE: DHT), Euronav NV (NYSE: EURN), Frontline Ltd. (NYSE: FRO), International Seaways, Inc. (NYSE: INSW), Diamond S, Inc. (NYSE: DSSI), Teekay Tankers Ltd. (NYSE: TNK) and Tsakos Energy Navigation Limited (NYSE: TNP).NAT has also far outperformed the general indices. The Dow and S&P are roughly flat during the period, while the NASDAQ is up 17%, about half the gain of NAT. The basket of tanker stocks excluding NAT outperformed the main indices through the first week of June. Since then, it has increasingly underperformed the indices.Chappell of Evercore ISI has previously attributed the outperformance of NAT to its popularity among retail investors on the Robinhood platform and its unpopularity among institutional investors. Other tanker stocks that were popular with institutional investors fared worse, he speculated, because institutional investors took profits on those equities as they rose due to floating storage and "faded the rally." NAT shares faced no such cap.The rest of the summer Asked about rate prospects for the rest of the summer, Chappell responded, "VLCC rates will always be volatile. I think we'll likely see them below breakeven at some point this summer, but mostly in the $20,000-$40,000-a-day range."OPEC+ is supposed to remove 2.7 million barrels per day of [production] cuts starting in August. If that happens, there's the short-term potential to break out above that range. But generally speaking, the drawdown of global inventories — both offshore and onshore — should continue to be a headwind.""We think rates are sustainable but will likely be range-bound in July and August," said Giveans.Could COVID spur another rate spike? Michael Webber, founder of Webber Research & Advisory, has previously argued that tanker stocks could emerge as a "COVID-19 global-relapse hedge." If the virus proliferates, another wave of large-scale business lockdowns would extend the floating-storage period and limit destocking, keeping more tankers out of the trading fleet for longer.Jefferies analyst Randy Giveans (Photo: John Galayda/Marine Money)Asked whether he believed a further surge in COVID cases could extend or add to floating storage, Giveans said, "I doubt we will see a similar spike in rates or in floating storage as we saw in March and April."That said, I do expect the contango [in crude pricing] to widen in the coming months.""And there is certainly concern about a second wave and slower-than-expected economic growth," said Giveans. "That's why the tanker equities remain at these oversold levels."According to Chappell, "Our macro team believes that even in a second-wave [COVID] scenario, we will not see the type of economic shutdowns that occurred in April and May."Given weaker overall demand, you need those types of extreme events — like oil demand dropping by 25-30 million barrels per day — for ‘supercontango' and floating storage. So, we believe [floating storage] inventories will unwind and transport demand will be pressured in all but the most extremely and unlikely COVID and economic environments." Click for more FreightWaves/American Shipper articles by Greg Miller MORE ON TANKERS: How retail investors on Robinhood could be skewing tanker stock performance: see story here. The COVID global relapse hedge theory of tanker pricing: see story here). For a look at the near-term headwinds facing the sector, see story here.Photoe: EuronavSee more from Benzinga * How Long Can PPP Keep Near-Bankrupt Carriers Afloat? (With Video) * How A .25 Million Insurance Liability Hike May Affect Owner-Operators * Most YRCW's Debt Ratings Held Steady By Moody's After Treasury Action(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]