{"id":7994,"date":"2024-11-16T07:36:26","date_gmt":"2024-11-16T07:36:26","guid":{"rendered":"https:\/\/finderica.com\/is-smooth-sailing-ahead-for-international-seaways\/"},"modified":"2024-11-16T07:36:26","modified_gmt":"2024-11-16T07:36:26","slug":"is-smooth-sailing-ahead-for-international-seaways","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7994","title":{"rendered":"Is Smooth Sailing Ahead for International Seaways?"},"content":{"rendered":"
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In the high-stakes world of global energy transportation, International Seaways<\/strong> (NYSE: INSW) stands out as a quiet giant. With a fleet of 83 tankers moving crude oil and petroleum products across the world\u2019s oceans, it plays a crucial role in keeping global energy markets flowing smoothly.<\/p>\n

Yet despite its strategic importance, the stock has taken a severe beating lately, having tumbled from $65 to about $43 in just the past few months.<\/p>\n

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Given that sharp decline, it\u2019s fair to wonder whether Wall Street has been too quick to throw the baby out with the bathwater.<\/p>\n

The company\u2019s enterprise value-to-net asset value (EV\/NAV) ratio sits at just 1.47. That means you\u2019d have to pay $1.47 for every dollar of the company\u2019s assets, which is a remarkable 76% discount relative to the average company.<\/p>\n

But cheap assets alone don\u2019t make a stock a bargain. What really matters is how efficiently the company converts those assets into cash. On this front, International Seaways shines.<\/p>\n

The company has generated positive free cash flow in three of the past four quarters, with its free cash flow averaging 5.59% of its net assets during that span. That\u2019s about 36% higher than the 4.12% average among similar companies.<\/p>\n

International Seaways\u2019 recent results reinforce its financial strength.<\/p>\n

The company\u2019s tankers continued to generate solid numbers in the third quarter despite lower market rates. Revenue reached $225 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) hit $130 million. International Seaways\u2019 largest supertankers earned $29,700 per day, and its medium-sized tankers brought in $29,000 per day.<\/p>\n

While those per-day rates were down from the exceptional levels they reached earlier in 2024, they remained well above the company\u2019s break-even cost of $13,400 per day. This helped International Seaways generate strong operating cash flow of $129 million for the quarter.<\/p>\n

Management appears to be confident in the company\u2019s performance, as they returned nearly $100 million to shareholders through dividends and share buybacks during the third quarter.<\/p>\n

<\/a>The future looks bright too. Global oil demand continues to grow at a faster-than-usual rate, while the aging global tanker fleet means limited new supply. In fact, shipping companies have only ordered enough new tankers to grow the global fleet by 13% over the next four years. That\u2019s a tiny number of new ships entering the market.<\/p>\n

When there aren\u2019t many new ships available but oil still needs to move around the world, companies that own existing tankers \u2013 like International Seaways \u2013 can charge higher prices for their services.<\/p>\n

Meanwhile, the company boasts a fortress-like balance sheet with nearly $700 million in total liquidity. This gives management plenty of dry powder to weather any storms while pursuing growth opportunities.<\/p>\n

All in all, though the stock\u2019s recent decline might spook some investors, the company\u2019s fundamentals paint a different picture.<\/p>\n

The Value Meter rates International Seaways as \u201cSlightly Undervalued.\u201d<\/p>\n

\"The<\/p>\n

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.<\/p>\n

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