Douglas E. Johnston
Long/short equity, hedge fund manager

Teekay Tankers: An Explosive Growth Story That Is Set To Sail

Teekay Tankers Ltd. (NYSE:TNK) is in the brutal business of conventional crude and fuel-product seaborne transport. It wasn't always so rough, as tankers enjoyed immense profits pre-2008, which of course led to over-investment, and subsequently, financial underperformance. That said, it appears there is light at the end of the tunnel for the tanker business, as demand for oil transport is growing at a healthy clip, while fleet growth is simmering at best. With capacity utilization rates expected to climb into the mid-80%, TNK should benefit greatly. Using modest assumptions, discussed below, we see 40c/share in net income for 2014 and close to $1/share in cash available for distribution (CAD). That cash will be used to pay down

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