In this article, we discuss the 5 best oil tanker stocks to buy now. If you want to read through our detailed analysis of the best oil tanker companies, go directly to 11 Best Oil Tanker Stocks To Buy Now.
5. SFL Corp Ltd (NYSE:SFL)
No of HFs: 14
Total Value of HF Holdings: $31.8 Million
With over 84 vessels, Bermuda-based, SLF Corporation Ltd, ranks 5th in our list of 11 best oil tanker stocks to buy now. The company owns a variety of vessels ranging from crude oil tankers, bulk and ore vessels, dry bulk carriers, and container ships. The company’s shares decreased 34% over the last twelve months. Despite the decrease, during the fourth quarter of 2020, SFL reported strong operating revenue of $115 million. The company also offers a quarterly cash dividend of $0.15 per share, payable on March 30.
At the end of the fourth quarter, there were 14 hedge funds in Insider Monkey’s database that held stakes in SFL Corp Ltd compared to 10 funds in the third quarter. Citadel Investment Group is the biggest stakeholder of the stock with 25.1 million shares, worth $24 million at the end of December.
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4. Euronav NV (NYSE:EURN)
No of HFs: 14
Total Value of HF Holdings: $64.5 Million
The Belgium-based Euronav NV ranks 4th in our list of 11 best oil tanker stocks to buy now. The company provides transportation and storage for crude oil. On top of this, the company also provides shipping services such as fleet management, protection management, and operational management. The company recently bought two eco-Suezmax vessels for a price of $113 million. However, the vessels are still in the shipyard of South Korea to be delivered in January 2022. During the third quarter of 2020, the company reported a dividend of $18.5 million or $0.9 per share.
As the fourth quarter ended, 14 hedge funds in the Insider Monkey database of 887 funds held stakes in Euronav NV, compared to 11 funds in the quarter earlier. Jim Simons’ Renaissance Technologies is the biggest stakeholder of the stock, which had 2.1 million shares, worth $17 million at the end of December.
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3. Scorpio Tankers, Inc. (NYSE:STNG)
No of HFs: 18
Total Value of HF Holdings: $43.9 Million
Scorpio Tankers, Inc. is one of the leading transporters of refined petroleum products worldwide. The company finances 128 product tankers and bareboat charters-in 10 product tankers. Shares of STNG decreased 3% over the last twelve months. The company currently offers a dividend yield of 2.53%. During the fourth quarter of 2020, STNG reported a net loss of $76.3 million or $1.41 loss per share. However, shares of STNG jumped by 7.65% on March 3 and closed at $17.17. In January 2021, the company reported a partnership with AVIC International Leasing Co., Ltd. STNG will trade three MR product tankers and one LR2 product tanker. This will give the company a liquidity increase of $32 million in aggregate after debt.
As of the end of the fourth quarter, 18 hedge funds in Insider Monkey’s database of 887 funds held stakes in Scorpio Tankers, Inc., compared to 14 in the third quarter. Jeremy Hosking’s Hosking Partners is the biggest stakeholder of STNG, with 1.2 million shares, worth $13 million at the end of December.
Evermore Global Advisors released its Q2 2020 investor letter, where they mentioned STNG. Here is what they had to say:
“Scorpio Tankers (STNG US), one of the world’s largest product tanker operators, was the largest detractor to Fund performance during the second quarter. COVID-19 has caused significant demand destruction in oil and other refined oil products which resulted in contango for diesel, jet fuel and gasoline forward prices that made floating storage an attractive option for traders and refiners. We saw the positive impact on spot rates at the end of March and April, which pushed rates higher to unprecedented levels.
Starting in late April, Saudi Arabia, Russia and OPEC+ eventually agreed to cut oil production which led to the contango trade to dissipate, which negatively impacted spot rates and STNG’s stock price. While current rates are no longer at record high levels, we believe STNG secured attractive rates during the second quarter and we expect the company to generate significant cash flows, a view that has been dismissed by the broader market. In addition, STNG has reached an agreement with scrubber manufacturers to delay the purchase and installation of 19 scrubbers until at least 2021 in order to take advantage of the current environment.”
2. DHT Holdings (NYSE:DHT)
No of HFs: 18
Total Value of HF Holdings: $88.0 Million
DHT Holdings is headquartered in Hamilton, Bermuda. In the first quarter of 2020, the company reported a total fleet operation of 27 VLCC with an 8,360,850 deadweight tons capacity. DHT offers a dividend yield of 3.50%. During the fourth quarter of 2020, the company reported a $266.3 million net income which marked the company’s highest result. The company recently bought two VLCC vessels from Daewoo. They are scheduled to arrive in 1H of 2021.
According to our database, the number of DHT Holdings’s long hedge fund positions decreased at the end of the fourth quarter of 2020. There were 18 hedge funds that held positions in DHT Holdings by the end of December, as compared to 24 funds in the third quarter. The biggest stakeholder of the company is Jim Simon’s Renaissance Technologies, which had 6.0 million shares, worth $31 million invested at the end of December.
1. Golar LNG Limited (NASDAQ:GLNG)
No of HFs: 31
Total Value of HF Holdings: $272 Million
The best oil tanker stock to buy now is Golar LNG Limited. The company operates 27 vessels and liquified natural gas (LNG) infrastructures. These include but are not limited to carriers, floating storage, and regasification units. In December 2020, the company announced the sale of FSRU LNG Croatia (formerly known as Golar Viking) to LNG Hrvatska. The sale will give the company a total of $47 million free cash between Q4 2020 and Q1 2021. As of March 6, the company’s shares trade at $10.72 and offer a dividend yield of 5.60%. Shares of GLNG soared 14% over the last 3 months. During the fourth quarter of 2020, the company reported revenue of $118 million.
There were 31 hedge funds in our database that held stakes in Golar LNG Limited, compared to 22 funds in the third quarter. Chrisitan Leone’s Luxor Capital Group is the biggest stakeholder of the stock, which had 4.7 million, worth $45 million at the end of December. Horos Asset Management mentioned GLNG in its Q3 2020 investor letter:
“At the end of August, Golar LNG’s subsidiary, Hygo Energy Transition (formerly Golar Power), announced its intention to go public through an IPO (sale of new shares issued with a capital raise). The aim of this move was to raise funds to finance its expansion in electricity generation and liquefied natural gas distribution. The valuation range released by Golar LNG for this subsidiary turned out to be significantly higher than our own valuation as well as the analyst estimates, which caused the stock to rally by 45% following the announcement.
However, on 23 September, an accusation against Eduardo Antonello, Hygo’s CEO, was made public. Specifically, he was accused of being involved in the incrimination of the oil drilling company Seadrill, where he worked until 2015, for bribes made in 2014. Following this announcement, Golar LNG’s share price plummeted by more than 30% in a single day and it was forced to suspend Hygo’s IPO, in addition to dismissing Antonello. Golar LNG claims that whatever happened to Antonello’s previous job position has no impact on Hygo. In our opinion, the tenders in Brazil conducted in recent years are especially transparent, with a computerized process, in which the submission of bids is done telematically. That said, an accusation of this nature is not good news for the company, whatever the result, since the reputational damage is high, takes some time to be repaired and may end up affecting the awarding of new contracts in this area. As of writing, Hygo’s valuation represents just over 25% of the value of the Golar LNG group.
Despite this, we still believe that Golar LNG has a high upside potential, not only because of the value of Hygo, but also because of other parts of the business, such as FLNGs (ships that liquefy natural gas at sea), where Golar LNG is one of the pioneers and most experienced and successful players in this market. Proof of this is that Golar LNG has restarted the manufacture of the FLNG Gimi—let’s recall that their client, BP, had asked for a 1-year delay in the manufacture, alluding to force majeure causes.”
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