International Seaways Inc (NYSE:INSW): A Bullish Investment Perspective

We came across a long thesis on International Seaways Inc (NYSE:INSW) on ValueInvestorsClub by rosie918. In this article we will summarize the bulls’ thesis on INSW. The company’s shares were trading at $44.74 when this thesis was published, vs. closing price of $41.39 on Jan 13^th.

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International Seaways Inc (NYSE:INSW) owns and operates a fleet of oceangoing vessels engaged in the transportation of crude oil and petroleum products. Unlike many other shipping companies, INSW is a 10-K filer and thus subject to more stringent filing, disclosure, and other standards.

The bull thesis revolves around the belief that INSW is currently undervalued, trading at approximately 66% of NAV and 72% of GAV. The author argues this setup does not constitute a value trap, as management has demonstrated strong execution by acquiring tonnage at near-trough valuations, selling older assets at favorable prices, reducing debt, and returning capital to shareholders. Another potential reason for undervaluation is the market pricing in the possibility of sanctions on Russia being lifted and the Houthis being neutralized in the Suez Canal, which could ease vessel traffic and lower rates – both of which are headwinds for INSW. While the author acknowledges these concerns, they argue that sanctions have historically been slow to lift, if at all, and the situation with the Houthis remains unresolved and uncertain. Lastly, the NAV discount is thought to be partly attributed to elevated vessel values and potential declines in tanker values from recent peaks in the S&P market, a concern the author dismisses by asserting that the impact on INSW is far smaller than the current magnitude of the NAV discount.

With that being said, the author believes that the current cheap valuation, coupled with low leverage and high liquidity of the company, makes INSW a compelling investment with asymmetric potential return. No precise target price is provided for the stock.

While we acknowledge the potential of INSW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than INSW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.