5 Best Oil Tanker Stocks To Buy Now

3. Scorpio Tankers, Inc. (NYSE:STNG)

No of HFs: 18

Total Value of HF Holdings: $43.9 Million

Scorpio Tankers, Inc. is one of the leading transporters of refined petroleum products worldwide. The company finances 128 product tankers and bareboat charters-in 10 product tankers. Shares of STNG decreased 3% over the last twelve months. The company currently offers a dividend yield of 2.53%. During the fourth quarter of 2020, STNG reported a net loss of $76.3 million or $1.41 loss per share. However, shares of STNG jumped by 7.65% on March 3 and closed at $17.17. In January 2021, the company reported a partnership with AVIC International Leasing Co., Ltd. STNG will trade three MR product tankers and one LR2 product tanker. This will give the company a liquidity increase of $32 million in aggregate after debt.

As of the end of the fourth quarter, 18 hedge funds in Insider Monkey’s database of 887 funds held stakes in Scorpio Tankers, Inc., compared to 14 in the third quarter. Jeremy Hosking’s Hosking Partners is the biggest stakeholder of STNG, with 1.2 million shares, worth $13 million at the end of December.

Evermore Global Advisors released its Q2 2020 investor letter, where they mentioned STNG. Here is what they had to say:

“Scorpio Tankers (STNG US), one of the world’s largest product tanker operators, was the largest detractor to Fund performance during the second quarter. COVID-19 has caused significant demand destruction in oil and other refined oil products which resulted in contango for diesel, jet fuel and gasoline forward prices that made floating storage an attractive option for traders and refiners. We saw the positive impact on spot rates at the end of March and April, which pushed rates higher to unprecedented levels.

Starting in late April, Saudi Arabia, Russia and OPEC+ eventually agreed to cut oil production which led to the contango trade to dissipate, which negatively impacted spot rates and STNG’s stock price. While current rates are no longer at record high levels, we believe STNG secured attractive rates during the second quarter and we expect the company to generate significant cash flows, a view that has been dismissed by the broader market. In addition, STNG has reached an agreement with scrubber manufacturers to delay the purchase and installation of 19 scrubbers until at least 2021 in order to take advantage of the current environment.”