Castanza Posted October 15, 2019 Share Posted October 15, 2019 How has this company not been caught for insider trading? The CEO bought 1500 calls $28 Jan 2020, then announces after the fact a purchase of tankers from a Trafigura who will coincidentally own 10% of STNG after the deal. Calls were bought when stock was at $27 and has now climbed all the way to $36... Link to comment Share on other sites More sharing options...
Pondside47 Posted October 15, 2019 Share Posted October 15, 2019 I’m guessing he bought it for IMO 2020, the stock went up because of sanction of COSCO. Even Teekay Tanker doubled. Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted October 15, 2019 Share Posted October 15, 2019 He bought the options after the announcement https://seekingalpha.com/news/3502115-scorpio-tankers-bugbee-buys-call-options-shares-rise-5-percent Link to comment Share on other sites More sharing options...
Castanza Posted October 15, 2019 Author Share Posted October 15, 2019 He bought the options after the announcement https://seekingalpha.com/news/3502115-scorpio-tankers-bugbee-buys-call-options-shares-rise-5-percent Good call, the yahoo article made it seem otherwise. Not to mention this company has a history with odd insider transactions. https://finance.yahoo.com/news/scorpio-tankers-inc-announces-purchase-214445091.html?.tsrc=rss Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted October 15, 2019 Share Posted October 15, 2019 No problem, happens to everyone. This is a weird chain of events though. Link to comment Share on other sites More sharing options...
Gamecock-YT Posted October 29, 2019 Share Posted October 29, 2019 Thought this was a decent write-up on the overall IMO 2020/STNG situation coming up for year end: https://whitechipstocks.blogspot.com/2019/10/shipping-is-where-money-goes-to-die.html? Link to comment Share on other sites More sharing options...
Saluki Posted October 30, 2019 Share Posted October 30, 2019 Thought this was a decent write-up on the overall IMO 2020/STNG situation coming up for year end: https://whitechipstocks.blogspot.com/2019/10/shipping-is-where-money-goes-to-die.html? I am long STNG, a medium sized position and have been building a smaller basket of some other product tankers (TNK, DSSI, ASC) and a couple of Bulk Carriers (SBLK, SALT). I normally hate shippers b/c of the debt, but with these companies, the catalyst is pretty easy to identify: IMO 2020 takes effect January 1, and since most companies didn't have the money to install scrubbers, they will need to use low sulfur fuel, which will increase demand for product tankers to carry it. The thesis is laid out pretty well here too where I first heard it : https://adventuresincapitalism.com/2019/01/13/scorpio-tankers/ https://adventuresincapitalism.com/2019/10/13/shipping-is-all-about-upside-leverage/ https://adventuresincapitalism.com/2019/02/12/great-bargains-shipping/ And in this podcast interview with Bugbee, the CEO of STNG. https://seekingalpha.com/article/4294613-robert-bugbee-scorpio-tankers-imo-positioning-podcast I am still doing my deep dive in shipping (read 3 lighter books and just got my textbook, The Business of Shipping in the mail today). I'm trying not to look for confirming information, just making sure I'm not missing anything, and it the risk/reward looks good to me. If this were something I was sure was well within my circle of competence (Cable, Telecom, Energy) I would have a position twice as big, but Its just on the edges of it so I'm treading lightly. There were a lot of fortunes made when VLCC's went from single hull to double hull and the scrapped singles caused a shortage that sent rates sky high. The same happened when internal combustion made steam ships unprofitable in the 1980s. It's too soon to tell, but if newer, efficient ships (or ships with scrubbers) have a big cost advantage over the old guard, it could potentially cause another shift that wipes out the technogical dinosaurs. Link to comment Share on other sites More sharing options...
Gamecock-YT Posted October 30, 2019 Share Posted October 30, 2019 Thought this was a decent write-up on the overall IMO 2020/STNG situation coming up for year end: https://whitechipstocks.blogspot.com/2019/10/shipping-is-where-money-goes-to-die.html? I am long STNG, a medium sized position and have been building a smaller basket of some other product tankers (TNK, DSSI, ASC) and a couple of Bulk Carriers (SBLK, SALT). I normally hate shippers b/c of the debt, but with these companies, the catalyst is pretty easy to identify: IMO 2020 takes effect January 1, and since most companies didn't have the money to install scrubbers, they will need to use low sulfur fuel, which will increase demand for product tankers to carry it. The thesis is laid out pretty well here too where I first heard it : https://adventuresincapitalism.com/2019/01/13/scorpio-tankers/ https://adventuresincapitalism.com/2019/10/13/shipping-is-all-about-upside-leverage/ https://adventuresincapitalism.com/2019/02/12/great-bargains-shipping/ And in this podcast interview with Bugbee, the CEO of STNG. https://seekingalpha.com/article/4294613-robert-bugbee-scorpio-tankers-imo-positioning-podcast I am still doing my deep dive in shipping (read 3 lighter books and just got my textbook, The Business of Shipping in the mail today). I'm trying not to look for confirming information, just making sure I'm not missing anything, and it the risk/reward looks good to me. If this were something I was sure was well within my circle of competence (Cable, Telecom, Energy) I would have a position twice as big, but Its just on the edges of it so I'm treading lightly. There were a lot of fortunes made when VLCC's went from single hull to double hull and the scrapped singles caused a shortage that sent rates sky high. The same happened when internal combustion made steam ships unprofitable in the 1980s. It's too soon to tell, but if newer, efficient ships (or ships with scrubbers) have a big cost advantage over the old guard, it could potentially cause another shift that wipes out the technogical dinosaurs. Yeah, I've been a bag holder in this since 2017 on the IMO 2020/orderbook thesis, averaged down to where I'm sitting on a decent gain on an 8% position. Like you, I'd add but I don't trust management and their family one iota. Lots of insider dealing between Scorpio Bulkers owns 11% of STNG, the options purchases mentioned above, and the painful dilution while pumping up the share price. I guess the good news is they've executed this playbook once before with OMI and the double hulls, selling out at the top. But be ready to move once Bugbee and the Lauro family start selling. Link to comment Share on other sites More sharing options...
Saluki Posted January 30, 2020 Share Posted January 30, 2020 I've taken a beating on this and every other one in my basket bet in the past month. It seems that the baltic dry index peaked in September: https://www.bloomberg.com/quote/BDIY:IND I thought rates for this (and every other kind of ship) would spike after January when the IMO2020 requirements kicked in and everyone would have to pass on higher prices to the customers. It's possible that a slowdown in the global economy is causing a greater downward pressure on rates than I anticipated. https://www.zerohedge.com/economics/surprisingly-ugly-us-freight-shipments-plunge-fastest-rate-aince-2009-hit-2011-levels Maybe this will cause more marginal ships to be scrapped and create a shortage that will result in a rate spike when demand picks up and validate the thesis? Maybe it will take out some of my basket companies? Maybe I bought too soon? Maybe I should've bought a year and a half ago and my basket would still be positive? Seems like the really massive drop off coincided with the Corona Virus news. I know it's a scary thing, but container and dry bulk ships carry stuff to and from China, not people. Anyone have thoughts on things that float? Link to comment Share on other sites More sharing options...
maybe4less Posted January 30, 2020 Share Posted January 30, 2020 I've taken a beating on this and every other one in my basket bet in the past month. It seems that the baltic dry index peaked in September: https://www.bloomberg.com/quote/BDIY:IND You know the baltic dry index has little to do with STNG, right? Link to comment Share on other sites More sharing options...
Saluki Posted January 31, 2020 Share Posted January 31, 2020 I've taken a beating on this and every other one in my basket bet in the past month. It seems that the baltic dry index peaked in September: https://www.bloomberg.com/quote/BDIY:IND You know the baltic dry index has little to do with STNG, right? Yes, not directly. But if dry bulk rates are going down it's because ships aren't being fully utilized, and if they are not sailing, then they aren't using fuel that STNG transports. I bought a basket that I thought would benefit from IMO2020. The demand for low sulfur fuel should benefit product tankers like STNG and TNK. The cost differential between low sulfur fuel and regular bunker fuel should benefit companies that have newer ships and can afford to install scrubbers (like Star Bulk and Scorpio Bulkers). But everything in the basket (bulk carriers, product tankers, container ships) has been getting killed the past few weeks. Teekay Tankers went from being up over 50% in 3 months to giving up all the gains and now being down another 10%. The others look pretty gruesome too. The only one that hasn't gone down a lot is Seaspan (which I've owned for a couple of years for different reasons) and I wish it would because it's the only one I like as an investment instead of a trade and would buy more. Just wondering if it's overreaction to Corona virus fears or if shipping will continue to struggle the way it has for the past decade. ..and a little venting on my part :) Link to comment Share on other sites More sharing options...
walt373 Posted February 1, 2020 Share Posted February 1, 2020 Tanker rates peaked at the beginning of the year coinciding with IMO2020, and have fallen ~80% in the span of a month... Seems that "sell the news" works in this market too. Link to comment Share on other sites More sharing options...
rayfinkle Posted March 15, 2020 Share Posted March 15, 2020 Hey there- Has anyone put a model together to get to a reasonable prediction of earnings for STNG and other comparables? Specifically it seems that because using the knowns (e.g., vessels by type, operating cost, the % fixed rates) we can use spot rates and some assumptions to get to a reasonable estimate for near-term FCF. Has anyone looked at this? Link to comment Share on other sites More sharing options...
SmallCap Posted March 18, 2020 Share Posted March 18, 2020 I'm trying to figure out the bear case for STNG. everything I see tells me that they are making tons of money right now and will for the foreseeable future months. All i am seeing is confirming my already existing bias. Can anyone give me a reasonable bear case? Link to comment Share on other sites More sharing options...
rayfinkle Posted March 19, 2020 Share Posted March 19, 2020 I spoke to IR the other day in detail. I think Q2 is going to going to be good. Day rates remain high, and despite scheduled maintenance driving fewer revenue days than in prior quarter, they should generate cash. The key question in my mind is what happens if there's an extended hit to demand. I'm having trouble thinking this through, ideas appreciated! At this rate they'll generate their entire market cap in cash in ~3 quarters and should not have trouble paying down debt maturities (so long as they don't to too many buy backs). When they report Q1 results and Q2 guidance it should be good, but no one will be paying attention. And it may be appropriate to not give any credit for performance more than two quarters out? Link to comment Share on other sites More sharing options...
Gamecock-YT Posted March 20, 2020 Share Posted March 20, 2020 Rates going up. Link to comment Share on other sites More sharing options...
rayfinkle Posted March 20, 2020 Share Posted March 20, 2020 Thanks Gamecock- Do you have a source for this? Just want to keep building knowledge. It seems like many of these folks (STNG, DHT) are trading at crazy low cf multiples. Anyone have thoughts on what drives day rates down vs. 2019 realized levels? Link to comment Share on other sites More sharing options...
ingalsbe.parekh Posted March 23, 2020 Share Posted March 23, 2020 Great writeup on the current opportunity: https://adventuresincapitalism.com/2020/03/19/crude-contango/ Link to comment Share on other sites More sharing options...
DeepValuePlay Posted March 24, 2020 Share Posted March 24, 2020 I'm not an expert on the shipping industry. Is STNG the best company to enjoy these higher rates? Do they have many long term charters or will they be able to immediately enjoy these spot rates? Do they have the right type of ships for which rates increased the most? This seems interesting... Link to comment Share on other sites More sharing options...
matts Posted March 24, 2020 Share Posted March 24, 2020 I'm not an expert on the shipping industry. Is STNG the best company to enjoy these higher rates? Do they have many long term charters or will they be able to immediately enjoy these spot rates? Do they have the right type of ships for which rates increased the most? This seems interesting... STNG has (almost?) all product tankers which means refined fuels. None of their ships carry crude oil so they don't benefit directly. However, what i believe is happening is that the refiners are going full-tilt because the spreads are very good right now and so the processed fuels also need more storage right now. If you want to play the oil contango thesis, Kuppy's other names, DHT, EURN, and TNK benefit directly. Sometimes kuppy is right, and sometimes he is very wrong. Link to comment Share on other sites More sharing options...
jmp8822 Posted March 24, 2020 Share Posted March 24, 2020 I'm not an expert on the shipping industry. Is STNG the best company to enjoy these higher rates? Do they have many long term charters or will they be able to immediately enjoy these spot rates? Do they have the right type of ships for which rates increased the most? This seems interesting... Look at the differences between 'clean' and 'dirty' tankers. STNG moves 'clean' product like distillate, gasoline, etc. FRO, DHT, EURN would be known as 'dirty' tankers which move crude and unrefined product. The thesis is basically on storage right now. The long end of the curve is higher than the short end on crude oil futures. This helps put a floor under spot rates for moving crude/storing crude. The question is how long will the contango in the curve last. I have my doubts and am not as bullish as some. If you can capture the one time pop strong enough it will work, but the math isn't totally a slam dunk in my opinion. Basically, in today's market I think you could find other things that might go up more than tankers, even though there probably isn't much downside from here. Link to comment Share on other sites More sharing options...
DeepValuePlay Posted March 24, 2020 Share Posted March 24, 2020 I'm not an expert on the shipping industry. Is STNG the best company to enjoy these higher rates? Do they have many long term charters or will they be able to immediately enjoy these spot rates? Do they have the right type of ships for which rates increased the most? This seems interesting... Look at the differences between 'clean' and 'dirty' tankers. STNG moves 'clean' product like distillate, gasoline, etc. FRO, DHT, EURN would be known as 'dirty' tankers which move crude and unrefined product. The thesis is basically on storage right now. The long end of the curve is higher than the short end on crude oil futures. This helps put a floor under spot rates for moving crude/storing crude. The question is how long will the contango in the curve last. I have my doubts and am not as bullish as some. If you can capture the one time pop strong enough it will work, but the math isn't totally a slam dunk in my opinion. Basically, in today's market I think you could find other things that might go up more than tankers, even though there probably isn't much downside from here. Please share - what are you looking at that is more attractive than tankers? Link to comment Share on other sites More sharing options...
Sunrider Posted March 25, 2020 Share Posted March 25, 2020 Depends on your thesis on tankers. If you believe that rates are going to stay where they are or are going to go up for crude carriers: EURN, TNK, DHT, NAT, FRO (in no particular order). I'm not an expert on the shipping industry. Is STNG the best company to enjoy these higher rates? Do they have many long term charters or will they be able to immediately enjoy these spot rates? Do they have the right type of ships for which rates increased the most? This seems interesting... Look at the differences between 'clean' and 'dirty' tankers. STNG moves 'clean' product like distillate, gasoline, etc. FRO, DHT, EURN would be known as 'dirty' tankers which move crude and unrefined product. The thesis is basically on storage right now. The long end of the curve is higher than the short end on crude oil futures. This helps put a floor under spot rates for moving crude/storing crude. The question is how long will the contango in the curve last. I have my doubts and am not as bullish as some. If you can capture the one time pop strong enough it will work, but the math isn't totally a slam dunk in my opinion. Basically, in today's market I think you could find other things that might go up more than tankers, even though there probably isn't much downside from here. Please share - what are you looking at that is more attractive than tankers? Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 6, 2020 Share Posted May 6, 2020 So q1 was really solid and q2 LR's are being booked at double q1 rates....yet the stock is down. Do people hate tankers this much? The market is crazy. Link to comment Share on other sites More sharing options...
TonyG Posted May 6, 2020 Share Posted May 6, 2020 people look at the spot rate and probably expect them to earn that right away, not realizing there is a lag. Link to comment Share on other sites More sharing options...
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