Entering text into the input field will update the search result below

Stay In Nordic American Tankers For Its Dividend And Technical Setup

May 08, 2020 12:43 PM ETNordic American Tankers Limited (NAT)59 Comments
RJW Insights profile picture
RJW Insights


  • A dedicated focus on NAT's dividend should attract passive income investors.
  • Contango spreads will increase as oil storage remains an issue.
  • NAT is set up for a nice technical bounce.


In previous articles on Nordic American Tankers (NYSE:NAT), I have detailed how I believe it is well-positioned to take advantage of the historically high spot rates for Suezmax tankers. Unfortunately, in the past few weeks, NAT has been "pumped" by CNBC and YouTube influencers who have introduced this stock to the masses of retail investors. With oil surging and spot rates declining, early investors have begun to take profits while retail investors have scrambled to cash out in hopes to mitigate their losses. This has led to a 44% decrease from the $9.00 high seen briefly on the morning of April 28th.

While the almost 3.5x explosion from the March 2020 lows may have been a bit much, the long-term potential for NAT remains lucrative as the company is focused on increasing its dividend and is set up remarkably well for a technical bounce.


Since NAT is overwhelmingly reliant on the spot market (21/23 ships), tightening spreads between contract months has significantly lowered spot rates, which in turn has adversely impacted NAT. As detailed in all of my articles currently published, I believe that spreads will increase as storage concerns persist. Although demand may increase with many state economies reopening and supply decreasing with OPEC+ cuts, there will still be a daily surplus of oil around 2-4 million barrels per day. In turn, facilities such as Cushing, where the WTI futures contracts are delivered, have no remaining storage available to lease.

To put further pressure on oil, Iraq has yet to decrease its oil production citing not knowing how to divide the cuts between oil fields. According to the latest OPEC+ meeting, it has agreed to cut 1mb/day, reducing its output from 4.585 MB/day to 3.585mb/day. This additional supply will not get used as oil consumption is expected to not bottom until Q2

This article was written by

RJW Insights profile picture
The focus of this page is to find esoteric investment ideas and view them with a unique perspective. Applying information learned from working in the finance industry, I believe a salient point of view regarding value and a long-term perspective will help assist in finding mispriced equities with massive growth potential.

Analyst’s Disclosure: I am/we are long NAT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.