Mitchell Martan
Investment Researcher for The Long Investor, Economics/Finance Background
Tanker companies such as International Seaways, Teekay Tankers, Nordic American, Okeanis Eco, DHT and Scorpio Tankers are a boring, underrated sector nobody talks about. Tankers are an absolute necessity, and while not a glamorous business like AI, they still produce great returns. x.com
Okeanis Eco Tankers looks cheap against its earnings. It trades at 8x trailing and about 15x next year's earnings, versus the roughly 19x shipping operators usually get. Fair value is $99.15 to $126.19, based on 19x next year's $5.93 EPS, give or take 12%, which puts the stock about 12% below the low end. The case leans on forecasts, since forward earnings are 45% above trailing. Above $154.18 it would be expensive. x.com
Teekay Tankers looks cheap against its earnings. At $100.83 it trades at 6x earnings versus the 14x oil and gas midstream operators usually get, and 35% below a $154.76-196.97 fair value range based on 14x mid-cycle EPS of $12.56. Its forward P/E is 9.3x. x.com
Tanker rates will likely plummet within two years and stay down for ten as new supply overwhelms demand, hurting Frontline, Teekay Tankers and Scorpio Tankers. Per Hedgeye, oil supertanker orders have hit a new all-time high, and tanker managements just can't help themselves. x.com
Canadian heavy crude is no longer captive to US refiners now that the Trans Mountain Expansion ships it to Asia, narrowing Western Canadian Select discounts and locking in long-haul Pacific tanker routes. About 77% of Westridge exports now go to Asia as buyers diversify from Middle East risk. MEG Energy has the most leverage to narrower heavy discounts; Canadian Natural, Cenovus and Suncor gain via pipeline capacity and Asian trading desks; Teekay Tankers and Frontline via Pacific vessel demand. … Show more
US energy stocks remain the trade because the Iran war keeps hitting oil supply; it is not a dip-buying chance in tech. Iran struck more Persian Gulf energy sites, including the Fujairah bypass route, erasing Monday's relief rally and lifting Brent back above $104. Hormuz is still contested, tanker insurance stays high, and the IEA's record 400 million-barrel release did not stop the climb. Chevron, Marathon Petroleum, Valero, Occidental and Phillips 66 held green as stock futures fell. x.com … Show more
StealthGas trades well below net tangible asset value even after its move up, as ocean shipping stocks show relative strength amid ongoing conflicts and shipping rates are reportedly rising. It has one of the best charts among shippers, with a clean triangle consolidation in an uptrend on telling volume. x.com
A drone strike on a Chevron tanker near the Caspian Pipeline Consortium terminal at Novorossiysk, reported by @DeItaone, is bullish for Ondas. x.com
Diesel stocks are the play, and US refiners Valero, PBF Energy and HF Sinclair work until an expected US export ban arrives. This answers @bubbleboi, who sees diesel or jet fuel as the best way to play the move and wonders whether it ties to the bombing of Saudi refiners. With the ban coming, the bigger focus should be European refiners OMV and Repsol, while Calumet offers the most torque through aviation fuels. x.com
Top Ships is a serial diluter worth fading after an 82% spike. The Greek shipper is notorious for shareholder destruction, with an active ATM and a reverse-split history, a $10M market cap and a 4.1M share float. Short interest is 7.7%, with 0.27 days to cover, and the downside target is $0.90. x.com
Imperial Petroleum and StealthGas should do well as natural gas demand increases. Both are so cheap that they are low risk, though there may be better ways to play the theme. x.com
