How 2011 Sank Nordic American Tankers
As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Nordic American Tankers (NYS: NAT) . The company owns a fleet of crude oil tankers it uses to transport oil around the world. But despite high oil prices, reduced demand in a weak U.S. economy along with a glut of tankers has combined to put a big hurt on the industry. Below, I'll take a closer look at the events that moved Nordic American's shares this year.
Stats on Nordic American Tankers
|Year-to-Date Stock Return||(50.5%)|
|Market Cap||$573 million|
|Total Revenue, Trailing 12 Months||$81.1 million|
|Net Loss, Trailing 12 Months||($51.5 million)|
|1-Year Revenue Growth||(41.5%)|
|Cash / Debt||$11 million / $170 million|
Source: S&P Capital IQ.
How did Nordic American Tankers do this year?
Nordic American Tankers has a fleet of 20 Suezmax crude oil tankers, up from just three less than seven years ago. Ordinarily, that would be good news, and it has certainly put Nordic American in a position where it can expect to see a big boost to its revenue -- as long as the global economy recovers.
The problem, though, is that several of Nordic American's competitors have done the same thing, building out their fleets and causing a glut of tankers. Recently, rival Frontline (NYS: FRO) said that it would need more cash in order to stay in operation through next year. That has hurt companies throughout the industry, including Ship Finance International (NYS: SFL) , Overseas Shipholding Group (NYS: OSG) , and Nordic American.
One thing that distinguishes Nordic American from its peers is its dividend. Teekay Tankers (NYS: TNK) has a higher dividend, but most other shippers fall well below Nordic American's near-10% level. But given that Nordic American has had to issue shares to finance those payouts, it's hard to feel comfortable about the dividend's sustainability going forward.
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At the time this article was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.