Alden Global’s Top 5 Stock Picks

2. Scorpio Tankers Inc. (NYSE:STNG)

Number of Hedge Fund Holders: 20

Scorpio Tankers Inc. (NYSE:STNG) is another oil transportation stock that features high on the list of top stock picks of Alden Global. The stock has been rebounding after touching a six-month low in August that prompted Deutsche Bank to downgrade it to a Sell rating. It is expected that global shipping disruptions, one of the reasons behind the supply chain issues facing many businesses, could last well into 2022. 

Regulatory filings reveal that Alden Global Capital owned over 190,500 shares in Scorpio Tankers Inc. (NYSE:STNG) worth more than $4.2 million at the end of the second quarter of 2021, representing 8.43% of the portfolio of the fund. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Hosking Partners is a leading shareholder in Scorpio Tankers Inc. (NYSE:STNG) with 803,540 shares worth more than $17 million. 

In its Q2 2020 investor letter, Evermore Global Advisors, an asset management firm, highlighted a few stocks and Scorpio Tankers Inc. (NYSE:STNG) was one of them. Here is what the fund said:

“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.”