Nordic American Tanker Ltd (NAT), Scorpio Tankers Inc. (STNG): Investors Should Brace for Storms in the Tanker Industry

Struggling to make headway
Elsewhere, Nordic American Tanker Ltd (NYSE:NAT) continues to flounder. The company is going nowhere and has failed to even make use of the rising day rates during the last quarter. Nordic American Tanker Ltd (NYSE:NAT)’s revenue collapsed 42% during the second quarter and the company burned through nearly $50 million in cash ($100 million of stock was issued to cover this). Moreover, Nordic continues to offer a dividend to investors, which looks attractive at first but careful analysis reveals that the company is having to make the payout from its cash balance. Unfortunately, this cash balance was supposed to be used for the purchase of a new ship at the beginning of this year — the order was cancelled.

Foolish summary
All in all, this volatility in the tanker market is not good news for Foolish investors. Indeed, it would appear that shipping company earnings are going to remain erratic for some time yet.

Investors should be prepared for significant turbulence ahead.

The article Investors Should Brace for Storms in the Tanker Industry originally appeared on Fool.com is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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