Matt Schuering

Frontline's a Buy Heading into Earnings

Interesting article on an interesting company. I have owned this stock in the past and was happy with its overall performance over the time I owned it, although it was quite depressed for some time. But I must agree with the previous comment that I think this stock has had its day in the sun. When the stock was $30 cheaper would have been a great time to have recommended it. The fundamentals of the company were no different then. Also, this company has no long-term contracts for shipping so they are truly at the mercy of the daily shipping rates, and once these drop, which could happen for a number of reasons, there is nothing FRO can do but see their stock price drop along with it. And although they have paid great dividends and the current tax treatment makes this a great play, I am concerned about dividend taxes in the future, this will definitely hurt the after-tax yield of this high paying stocks. And if they declare the special dividend, and the stock "pops" like you say, the market will take the special dividend right out of the stock price once it goes ex div. This is not the right reason to purchase this stock. Also, they have enjoyed nice operating income, but look at quarter over quarter numbers and see how much of this operating income came from a gain on the sale of assets. I liked it at $31 but at $65 it is too high for me to get back in. If I were long I would be thinking about taking some money off the table.