Energy Prospectus

Re: TNK, analyst comments

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TNK stock price
Qtr end stock price ( with the puny dividend)

Feb 22, 2023 35.82
at qtr end
June 2023... 37.84
Sept 2023... 41.44
Dec 2023 ... 49.97
Feb 22 2024 .. 54.78 >> after losing 3.16 on the day

One year return

capital appreciation 54.78/35.82 = 52.9 %
Puny dividend 1.75/35.82 = 4.9 %
-------------------------------------------
Total Return 1 year 57.8 %

the value of any stock is the cash flow the business generates not the dividend paid

I must second what Fraser says about this company. While I prefer INSW (9.5 % dividend) with competitive cash flow %'s, TNK brings a ROIC of 27%, FCF yield of 32% and the EBV/share (economic book value) of $256/share. Fraser, I'm assuming since you loathe dividends, I'm assuming you would either purchase more ships or you would take 50% of the FCF and but back 20% of the shares?

If i had in an IRA I wouldnt care. A dividend sends me a tax bill but I appreciate all don't feel the same way.

BTW, I like INSW as well.

I think TK claws back to 8 level in a month but with this volatility it could be next week.

I would buy back shares and charter in some ships for 2 -3 years. I don't like buying new ships at top of market. The business is cyclical. If oil demand drops off , it would hurt tankers, so its tied into the price of oil.

If you think the world needs oil it has to move from point A to point B.

Covid sent oil down and tanker rates. So thats a risk
If the overall market craters 25 %, thats a risk as everything gets sold off except NVDA

Fraser, which is the better value right now: TK or TNK?

I like TK better than tnk at the moment

Cash + TNK at a discount and TNK is trading at a discount. So you get a double scoop of discounts. The drop on Thursday was excessive on both names but TK was hit harder widening the discount. See peers

Clean tankers (stng) see rates , yellow line is this year

Don't think this will end tomorrow...Maybe in 9 months if Orange Man wins.

https://www.zerohedge.com/commodities/oil-tanker-shortage-emerges-after-red-sea-crisis-disrupts-global-trade