We recently compiled a list of the 10 Worst Performing Energy Stocks in 2024. In this article, we are going to take a look at where TORM plc (NASDAQ:TRMD) stands against other worst performing energy stocks in 2024.
U.S. Crude oil prices fell 2.56% on Tuesday, January 21, with U.S. crude closing at $76.89 per barrel. Global benchmark Brent crude also declined, settling at $79.29 per barrel, a decrease of 86 cents or 1.07%. The drop in oil prices came as President Donald Trump, following his inauguration on Monday, announced that his administration was considering imposing 25% tariffs on Canada and Mexico. These tariffs could potentially slow economic growth and, in turn, impact fuel demand.
In addition to the tariff considerations, President Trump signed a series of executive actions aimed at boosting domestic energy production. He declared a national energy emergency, sought to roll back restrictions on offshore drilling that were implemented during the Biden administration, and lifted the pause on new liquified natural gas (LNG) exports. These moves are expected to stimulate the U.S. energy sector by increasing domestic production and easing regulatory constraints.
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In an interview with Yahoo Finance on January 22, Andy Lipow, President at Lipow Oil Associates, discussed the implications of President Trump’s declaration of a national energy emergency and his push for increased oil and gas production in the United States.
Andy Lipow noted that while the Trump Administration’s policy of “drill baby drill” aims to boost domestic oil production, it does not necessarily translate into immediate or significant increases in exploration and production. The decision to invest in new drilling operations, especially in high-cost areas such as the offshore Gulf of Mexico and Alaska, depends on the financial viability and the current price of crude oil. Despite the easing of regulations and the availability of more acreage, oil companies will weigh the potential financial rewards of investing large sums of money to increase production.
Lipow acknowledged that the United States is already at peak oil production, outpacing both Russia and Saudi Arabia. This trend has developed over the past decade, and while the U.S. is expected to set another production record in 2025, the impact on global oil prices is not straightforward. The market is more influenced by the Administration’s policies overseas, such as sanctions on Russian oil exports and Iranian oil production. According to Lipow. the imposition of 25% tariffs on oil imports from Canada and Mexico could divert these supplies elsewhere, potentially raising the cost of gasoline and diesel for U.S. consumers. This is contrary to the Trump Administration’s goal of lowering energy costs. Lipow expressed that the combination of these factors, including sanctions on Russia, Iran, and Venezuela, coupled with slow global oil demand growth, is likely to result in higher prices throughout the year.
Lipow believes that the rollback of executive orders, such as lifting the freeze on new liquefied natural gas (LNG) permits, is seen as positive for U.S. energy production. The recent opening of new LNG export facilities in Louisiana and Corpus Christi, along with several more facilities coming online in the next couple of years, is expected to boost U.S. energy exports.
The Trump administration’s focus on supporting domestic energy production through regulatory rollbacks, increased access to resources, and incentives for new projects is expected to provide much-needed relief for companies currently facing challenges.
Sailors on the main deck of an oil tanker, watching as oil is being loaded.
Our Methodology
To compile our list of the 10 worst performing energy stocks in 2024, we used the Finviz and Yahoo stock screeners to find stocks that have experienced the most significant decline over the last year and have a market cap of more than $1 billion as of January 21. We then narrowed our choices to 10 stocks with the worst performance. We also included their market cap and hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in descending order of their performance as of January 21.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
TORM plc (NASDAQ:TRMD)
1-Year Performance as of January 21: -44.18%
Market Cap as of January 21: $1.89 Billion
Number of Hedge Fund Investors: 25
TORM plc (NASDAQ:TRMD) is a prominent international marine shipping company specializing in transporting petroleum products. The company manages a fleet of around 90 product tanker vessels, which are designed to transport energy and refined petroleum products from refineries.
TORM plc (NASDAQ:TRMD) has been actively renewing and expanding its fleet to improve operational efficiency and capitalize on market opportunities. Recently, the company purchased eight second-hand MR vessels for $340 million, built between 2014 and 2015 at Hyundai Mipo Dockyard, these vessels are part of its ongoing fleet replenishment program. Furthermore, TORM plc (NASDAQ:TRMD) remains focused on maintaining a robust cash position and a secure debt maturity profile. With no major capital expenditure commitments, the company enjoys the financial flexibility to pursue new opportunities as they emerge. Additionally, the company is dedicated to sustainability and innovation, ensuring its operations comply with evolving industry standards and environmental regulations.
TORM plc (NASDAQ:TRMD) is also focusing on leveraging current market dynamics influenced by geopolitical tensions and the restructuring of global trade routes. The company has observed a shift in trade patterns favoring longer distances, driven by sanctions on Russia and Houthi attacks in the Middle East. These developments have led to longer voyages and increased ton-mile demand, resulting in a tight supply-demand balance in the product tanker market. With a fleet optimized for long-haul trade, the company is well-positioned to benefit from these trends.
Overall, TRMD ranks 4th on our list of the worst performing energy stocks in 2024. While we acknowledge the potential of TRMD as an investment, our conviction lies in the belief that 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 TRMD 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 is originally published at Insider Monkey.
