Opinions
Mark Grammer
Frontline Ltd
FRO-N
DON'T BUY
Jun 28, 2005
A tanker company. Has been a pretty good business of late. Trading on a low multiple and a general rule is to sell shippers on low multiples.
$39.790
Stock price when the opinion was issued
Transportation
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BUY
This has been one of the greatest stocks in the past few years. Trades it quite often. As oil shippers, they know they are in a cyclical business, so rather than keeping their money during the good times they paid a dividend. Dividend is sustainable as long as their earnings are sustainable.
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DON'T BUY
An oil shipper. What we are going through in the shipping world is that all the shippers have had to go from single hulls to double hulls for environmental reasons. There are not enough double hulls to move the oil around.The market has really moved up on these. Have a good dividend because shipping rates are expensive. Too expensive.
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TOP PICK
A Norwegian company. Largest tanker company in the world. This is especially important to the yield hungry investor who has been playing the royalty trusts. Has about a 15% yield. Only trades at about 4X PE. Tanker stocks cash flow a significant amount of money. Try to pick it up closer to the $42 range.
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