Why Nordic American Tanker Ltd's Shares Popped
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: Nordic American Tanker Ltd's shares jumped 11% today after taking shipment of new vessels.
So what: Nordic American Offshore, a company that Nordic American Tanker sponsored and owns 26% of, has taken shipment of six platform supply vessels, or PSVs. These ships supply services to offshore oil and gas rigs, particularly in the North Sea market, which is currently in high demand.
Now what: The tanker market has been a disaster recently, so getting some exposure to offshore drilling in any capacity is good for investors. Five of the six vessels are already under contract for between $25,000 and $29,000 per day, well above the $12,000 breakeven rate. With weakness in the tanker business, I don't think this makes Nordic American Tanker a buy, but it's an incremental positive that could give it time to see market conditions improve, if they ever do.
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The article Why Nordic American Tanker Ltd's Shares Popped originally appeared on Fool.com.
Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.
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