TORM: Product Tanker Play For Income-Minded Investors

Jan. 10, 2024 11:44 PM ETTORM plc (TRMD) StockTRMD29 Comments
KD Research
2.13K Followers

Summary

  • TRMD has a large fleet of 93 ships, including 20 LR2 vessels, and has a conservative balance sheet with strong liquidity.
  • Catalysts for the tanker market include declining diesel inventories, growing refinery dislocation, and the Red Sea crisis.
  • The company’s liquidity position is bulletproof with $240 million cash, $724 million operating earnings, and $857 million operating cash flow.
  • The company trades at 112% P/NAV. Although, TRMD pays dividends with a 21.7% yield. They are well covered by the company's excess profits and cash reserves.

Oil Tanker

HeliRy

Introduction

The product tankers market had a solid last quarter. The Red Sea crisis, declining diesel inventories, and new refining capacity expected to come online might extend the rally in the product tanker stocks. One of the best ways to get exposure is TORM

This article was written by

2.13K Followers
I am a voracious reader and self-taught investor. In the past, I was an accountant in the maritime industry. Now, I am a happy retiree passionate about writing and financial markets. As the kids are grown up, I have time to pursue my endeavors: growing my portfolio and developing my writing skills. You will find enticing investment ideas in KD Research that are not limited by region or sector. However, all of them share a few common things: • They are overlooked. • They offer asymmetric risk rewards. • They pay dividends with juicy yields. When I filter for new ideas, I look for at least two of the three to be presented. As an investor and analyst, I prefer shipping and mining enterprises. However, I will dive deep without hesitation if I spot a company from another industry suitable for my investment style. My analytical approach is focused on fundamentals. Do not forget I was an accountant, and I love scrambling numbers. Nevertheless, the fundamentals are not good enough to time the market. I add technical analysis to avoid being too early or too late for the party. I am excited to join Seeking Alpha contributors and share my thoughts with SA's thriving investor community. I am associated with the existing author Banks and Beyond.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of TRMD either through stock ownership, options, or other derivatives. 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.

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