Nordic American Tankers: More Green Shoots Emerge Right As War Breaks Out

Summary

• After struggling throughout 2021, Nordic American Tankers has thankfully seen their operating conditions improve during the fourth quarter.
• This saw their cash burn slow down compared to earlier in 2021 but now they suddenly face an industry shocked by the Russian invasion of Ukraine.
• Whilst this has initially sent their charter rates surging, it remains a highly unpredictable situation that leaves many questions unanswerable.
• At least their liquidity has improved and they are now facing less risk of breaching their debt covenant as previously, thereby de-risking their shares.
• Regardless, investors would be prudent not to get too relaxed given this highly unpredictable situation, and thus as a result, I still believe that my hold rating is appropriate.

1971yes/iStock via Getty Images

Introduction

After struggling throughout the first half of 2021, Nordic American Tankers (NYSE:NAT) was seeing green shoots of a recovery following the third quarter of 2021 but at the time, these were overshadowed by the risks

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.