Frontline Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Frontline (NYS: FRO) climbed 11% today after analyst Dahlman Rose upgraded the oil tanker operator from hold to buy.
So what: Along with the upgrade, Dahlman planted a price target of $9.50 on the stock, representing about 35% worth of upside to yesterday's close. Frontline shares have been crushed over the past year on paltry shipping rates, but the Wall Street analyst cited an effective restructuring -- which helped it retain big spot market exposure -- and a strengthening balance sheet as catalysts for a turnaround.
Now what: Don't let this pop keep you from looking into the stock. Even with today's double-digit rally, Frontline shares are down more than 65% over the past year and continue to trade at a wide price-to-sales discount to the entire shipping space. As long as the balance sheet keeps firming up, the biggest drag on the stock should continue to steadily fade.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.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's disclosure policy always gets a perfect score.
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