4.3900 -0.01 (-0.23%)
Before hours: 5:34AM EDT
Price Crosses Moving Average
|Bid||4.3300 x 4000|
|Ask||0.0000 x 3000|
|Day's Range||4.0800 - 4.4600|
|52 Week Range||1.6600 - 9.0000|
|Beta (5Y Monthly)||0.46|
|PE Ratio (TTM)||26.83|
|Earnings Date||Aug 14, 2020 - Aug 18, 2020|
|Forward Dividend & Yield||0.56 (13.79%)|
|Ex-Dividend Date||May 22, 2020|
|1y Target Est||6.25|
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 […]
July 2, 2020 Dear Shareholders and Investors, Mr Herbjorn Hansson has today bought 50,000 shares in NAT at $4.08 per share. Best regards,.
Earlier this week there was an article in the international press, to the effect that the US Treasury is considering to expand its list of tankers under sanctions from 80 to 130 vessels. If implemented, such a level of tonnage restrictions has the potential of tightening the balance between supply and demand of tankers. Matters discussed in this press release may constitute forward-looking statements.
June 24, 2020 Dear Shareholders and Investors, Mr Alexander Hansson has today bought 50,000 shares in NAT at $4.11. Alexander Hansson is a Director of.
Investment firm B. Riley FBR has been looking at dividend yields, and is telling investors that now is the time to buy in. The reason is simple: even after the market rally that began on March 23, many equities remain affordable.It may also be something of an artificial situation. The coronavirus crisis pushed economies into a freefall, and markets followed suit. The result was depressed stock prices and inflated dividend yields. We’re well past the market bottom, but how far from the top remains uncertain. And this is where B. Riley FBR is finding both high dividend yields and buying propositions.We’ve used the TipRanks database to pull up the data on three of the firm’s recent recommendations. They are low-cost dividend plays that are yielding 9% or better.Nordic American Tanker (NAT)We start in the oil business, specifically, oil tankers. Petroleum and its by-products provide the motive power of the modern economy, and remain essential even during recessionary times. Nordic American, based out of the island of Bermuda, is major operator in the tanker business, with 23 Suezmax vessels. The class name comes from the ships’ size – they are the largest tankers that can traverse the Suez Canal, shortening the travel time from Asia and the Middle East to Europe and the Atlantic.In Q1, Nordic saw a 60% increase in net voyage revenue, to $86.2 million. And where many companies saw earnings drop sharply in the quarter due to the coronavirus pandemic, Nordic’s Q1 EPS beat the estimates by 8% and grew 200% sequentially.The strong revenues explain the company’s dividend performance. Nordic paid out 7 cents per share in Q1, 14 cents in Q2, and has recently declared at 20 cent payment for Q3, due in August. At 80 cents annualized, the Q3 dividend gives an eye-popping yield of 16.39%.Liam Burke covers this stock for B. Riley FBR, and in his last note he pointed out the advantages that the company’s homogenous Suezmax fleet gives in scheduling routes and vessel utilization. In his most recent review of the stock, he notes the dramatic increase in tanker fees charged: “Time charter equivalent (TCE) per day for 1Q20 was $44,100 compared to $26,025 in 1Q19 and $31,700 during 4Q19… The full benefit of Suezmax rate increases, during 1Q20 has been driven by the demand for crude storage that has more than offset the steep decline of global oil consumption.”Burke’s $7.50 price target suggests a one-year upside to Nordic of 67%, and fully supports his Buy rating. (To watch Burke’s track record, click here)However, given current economic conditions, and consequent low demand for oil, Wall Street is still cautious on Nordic – and that is reflected in the ‘Hold’ analyst consensus rating. This is based on 1 Buy, 1 Hold, and 2 Sell ratings given in recent months. Shares are selling for $4.47, and the average price target, at $4.70 suggests a modest upside of 5%. (See Nordic stock analysis on TipRanks)Eagle Point Credit Company (ECC)Next up is Eagle Point Credit. Eagle, a capital investment company focused on current income generation, invests mainly in equity and junior debt tranches of CLOs. The niche kept Eagle in positive territory for Q1 earnings, netting the company 23 cents per share.A profitable quarter is always good, but there was bad news, too. EPS came in below the forecast, missing by 37%. Economic conditions in Q1 forced management to slash the dividend payment by 60%, reducing it from 20 cents monthly to just 8 cents. It was a deep cut, but it keeps the dividend payment sustainable for the company.From investors, the dividend cut is noticeable – but the yield remains impressive. At an annualized rate of $1.96, the yield on ECC’s dividend payment is 13.43%. When compared to the 1.9% average among peer companies in the finance sector, or the ~2% average found on the S&P 500, or the >1% found in Treasury bonds, ECC’s return is simply unbeatable. By cutting the payment, management has shown a commitment to keeping it sustainable.That sustainability is a key point for 5-star analyst Randy Binner. He writes, “The company’s reported quarterly recurring CLO cash flows averaged $1.01/share over the last 12 months. Similar levels of recurring cash flows would leave a large cushion to service the $0.24 quarterly dividend going forward.”Binner puts a Buy rating on ECC, with an $8 price target to indicate room for 14% upside growth in the next year. (To watch Binner’s track record, click here)Overall, there are two recent reviews on Eagle Point Credit, and they are split – one says Buy and one says Hold, giving the stock an analyst consensus rating of Moderate Buy. Shares are priced at $7.02; as the buy rating belongs to Binner, his $8 target stands in place of an average. (See Eagle Point stock analysis on TipRanks)Ladder Capital Corporation (LADR)Last up is Ladder Capital, a specialist in commercial mortgages, with customers in 475 cities across 48 states. Ladder provides loads from $5 million to $100 million, and boasts over $6 billion in assets. Most of Ladder’s activities are east of the Mississippi.In Q1, net income fell by more than half, from 37 cents EPS to 15 cents. At the same time, the Q1 dividend remained high, and was paid out at 34 cents per share.Since then, management has cut the dividend payment by 41%. As with Eagle above, this was a move to keep the dividend sustainable going forward. The new payment, 20 cents per share, gives a yield of 9.72%, attractive to investors, especially coming from a company with a strong liquidity position.Ladder’s solid balance sheet caught the eye of B. Riley’s Timothy Hayes, who wrote, “Looking forward, we view LADR to be defensively positioned with over $860M of unrestricted cash, a ~ $1.7B securities portfolio that largely consists of liquid AAA-rated CMBS, and ~$1.8B of other encumbered assets, largely consisting of senior first mortgage loans.”Hayes gave LADR shares a Buy with an $11 price target. His predicted upside is substantial, at 40% for the coming 12 months. (To watch Hayes’ track record, click here)Ladder Capital is unique on this list, with a Strong Buy rating from the analyst consensus. Based on 4 Buys and 1 Hold, this rating suggests that Wall Street is impressed by Ladder’s ability to weather the pandemic and chart a path forward in 2H20. LADR shares are selling for $7.98, and the $10.70 average price target indicates room for 35% upside growth. (See Ladder stock-price forecast on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
At a time when other companies are cutting back their dividend distribution, it is important for us to emphasize that dividend remains a priority for NAT. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation.
High expenses and coronavirus-led supply chain disruptions are major headwinds for ZTO Express (ZTO). Increased parcel volumes are tailwinds.
Investors need to pay close attention to Nordic American Tankers (NAT) stock based on the movements in the options market lately.
It is the year of the retail investor, and listed shipowners, like other public companies, have seen a wave of newcomers buy their stock.Shipowners are happy. They need all the buyers they can get to boost their tepid trading liquidity. Retail buyers of shipping stocks are not so happy. In the case of several tanker equities, retail enthusiasm appears to have been heavily countered by institutional selling.Diverging From Fundamentals Retail investors are getting a lot of ink, much of it negative. Famed Wall Street Journal columnist Jason Zweig recently lamented that "swarms of willfully ignorant investors are day-trading their way through the pandemic ... computer algorithms pick up on such trades and pile in to ride the momentum ... in the old days, the little guy mimicked the big boys; right now, it may be the other way around."A central criticism of some retail investors — with traders on the Robinhood platform getting the most press — is a lack of focus on listed companies' fundamentals that can drive valuations away from those fundamentals.In ocean shipping, shares that become uncorrelated with freight rates exemplify this divergence. Evercore ISI analyst Jon Chappell commented in a research note on Monday, "As many shipping investors are all too aware, if the historically tight correlation of stock prices and spot rates breaks, it can be painful for both longs and shorts until fundamentals eventually return to relevance."Why VLCC Stocks Lag NAT Retail focus on the tanker sector has been primarily driven by the floating-storage thesis, which posits that tankers removed from transport service for storage duties will equate to higher spot rates for the tankers still available for transport.Floating storage most directly affects owners of very large crude carriers (VLCCs; tankers that carry 2 million barrels of crude oil). Ironically, analysts highlight Nordic American Tankers (NYSE: NAT) as the main benefactor of the "Robinhood effect" — and NAT doesn't own VLCCs, it owns Suezmaxes (tankers that carry 1 million barrels).According to Chappell, "The correlation of NAT shares with Suezmax rates was extremely tight until right about the time that the ‘floating storage' took hold, NAT was on CNBC, and Robinhood user ownership spiked. Spot rates have plummeted back to trough levels of late, yet the stock price has been somewhat resilient."(Chart: Evercore ISI)In follow-up comments to FreightWaves, Chappell explained, "There's an element of broader retail participation across the [tanker] group, especially as the floating-storage theme gained broader market attention, but NAT has been the outlier, by far, both from the holders on retail platforms and share-price performance."NAT has outperformed [VLCC owners] DHT (NYSE: DHT), Euronav (NYSE: EURN) and Frontline (NYSE: FRO) by 29-37% year-to-date and by 66-73% over the last three months. Meanwhile, the Suezmax rate spike was shorter in duration and of lesser magnitude than the VLCC spike and that segment [Suezmaxes] now sits near 52-week lows while VLCCs are still making very good money."One reason the top VLCC equities didn't perform as well as NAT may relate to "the big boys" — the institutional investors — who are historically less attracted to NAT."The institutional investor base was early to the VLCC names, either because they believed in the 2020 market fundamentals before coronavirus or they were quick to identify the floating-storage potential," said Chappell. "But just as rates were skyrocketing and retail was getting involved, institutions began fading the rally, so I think they put a lid on the VLCC upside through taking profits, whereas they rarely get involved in NAT, so there was no selling as Robinhood and his merry men were adding aggressively."Then the recovery of oil pricing spurred further selling by larger funds that had shares of VLCC owners more so than NAT. "Tankers were the only beneficiary of plummeting [oil] demand across energy, so funds were buying tankers to hedge other energy positions," said Chappell. "When energy began to rally, they sold the tanker positions."According to analyst J Minztmyer of Seeking Alpha's Value Investors Edge, retail investors were "attracted by the eye-popping daily rates and the primary stock of focus was NAT, which ironically was one of the most overvalued stocks. These retail investors absolutely had an impact on these stocks. NAT had record levels of daily volume about six weeks ago."Mintzmyer also saw institutional fund behavior counterbalancing retail. "We can argue that retail traders shot themselves in the foot a bit by trying to ‘trade earnings' and keeping a hyper-focus on daily rates changes, while not really understanding or appreciating the long-term bullish value prospects. However, retail investors and traders at least stepped up to participate."Institutions, on the other hand, have primarily stayed out of the sector. They loved it in December, but with COVID-19, there hasn't been much inquiry. Many of the hedge-fund types I've worked with have actually been trying to short the sector, not so much as a valuation play, but more as sort of ‘Anti-Robinhood' because they've seen these waves come and go."Past, Present And Future Investors The retail-versus-institutional mix came up during a virtual panel on Monday presented by Marine Money."You saw a steep increase in liquidity, the number of shares traded," recalled Lois Zabrocky, CEO of International Seaways (NYSE: INSW) of the initial wave of retail buying. "There was retail interest that was short-lived but there is also retail interest that is more ‘long' and more interested in industry fundamentals. There was a tremendous amount of short-term interest that came in and went out of our shares very quickly, but there is still a reasonable component that is ‘long-only.'"According to Craig Stevenson, CEO of Diamond International Shipping (NYSE: DSSI), "We started off with fast money, people trying to make a quick buck, but now it's like a sector rotation out of growth and into value. When you're playing with 50-cent dollars, there's a lot of value here."Jefferies shipping analyst Randy Giveans explained during the Marine Money event, "In March and April, the only questions people were asking were: What are the rates today? What are the floating-storage economics? All people cared about was today, today, today."Now they're asking: What do rates look like in a quarter? At the end of the year? In 2021? People are starting to see a little further ahead. There's less of a myopic focus on things like intraday Brent moves, and more of a focus on supply-demand fundamentals — which is probably healthier than just day-trading the rates."Mintzmyer told FreightWaves that retail money focused on tanker stocks "was mostly fast-money traders who sort of came and went between mid-March and mid-May without much regard for long-term fundamentals."For tanker prices to appreciate meaningfully in the longer term, we need to see large funds come back to the space. Retail interest and traders will help at the margins and will improve liquidity, but cannot support stock valuations. This is evident in the average price-to-net asset value discounts of 30-40% or more across the board — an obviously broken market, just due to not enough investors to buy available shares. There just aren't enough buyers with deep enough pockets out there." Click for more FreightWaves/American Shipper articles by Greg MillerPhoto by Buro Millennial from Pexels.See more from Benzinga * FBX Report: June 15, 2020 * Late Season Snowfall Heads To Northern Rockies * Warehouse Automation Management Startup CognitOps Raises M In Seed Funding(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
On Wednesday, the Federal Reserve announced that it would be holding rates steady as states push through the initial phases of re-opening. Teddy Parrish of Parrish Capital joins The Final Round to discuss his thoughts on the Federal Reserve and the U.S. economy.
LNG carrier GasLog (NYSE: GLOG) closed the day 17.2% higher. This, too, could be a reason for why cheaper oil might seem to benefit oil tanker stocks -- and LNG tanker stocks as well, if one assumes that demand for one form of energy will roughly track demand for another.
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