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FBR downgrades "high beta" tanker stocks OSG, FRO and GMR to Market Perform, saying the trio is...

  • Wednesday, August 10, 2011, 7:52 AM ET
    FBR downgrades "high beta" tanker stocks OSG, FRO and GMR to Market Perform, saying the trio is vulnerable to macroeconomic risks which could "depress demand and slow the tightening of the tanker market." Converesly, firm upgrades NAT to Outperform, lauding its "healthy dividend yield, firm fiscal footing, and disciplined management." FRO -2.5% premarket.
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This news story has 2 comments:

  •  
    Just look at the BDI and HARPEX. Harpex rolled over and is at Mid 2010 levels headed for 2009.
    10 Aug 2011, 07:54 AM Reply Like
  •  
    Frontline (FRO) and Genmar (GMR) are mostly chartered at the moment. The index you want to follow is not BDI, but BDTI which at the moment is still above 2009 levels. BDI is only for container ships, so that tells nothing about tankers. All the indices are only for spot rates, so you need to read weekly ship broker reports to find out about chartered rates.

    navigatemag.ru/indices/

    I am not sure where the ratio of spot to chartered sits with Overseas Shipholding Group (OSG) though last I read about them early this year indicated mostly chartered. Both OSG and GMR have ships that qualify for Jones Act for US bound cargoes, and they are the two largest US based tanker companies.

    Disclosure: large position in GMR and FRO, but not increasing that position currently.
    10 Aug 2011, 01:42 PM Reply Like
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