- The rise in the cost of seaborne transportation of refined petroleum products has been a huge boon for STNG, a Monaco based operator of 124 product tankers.
- STNG stock has more than doubled YTD despite the broader market slipping into bear territory. STNG's bull run looks poised to continue on high product tanker rates.
- Moreover, the company is aggressively paying down debt and buying back stock to maximize shareholder value, a factor that may have contributed to it outperforming its peers.
- However, the downside risks shouldn't be ignored. STNG is overvalued, its net debt stands at more than 10x cash and deficits have reached $623 million, setting it up for a major drawdown should rates nosedive.
For further details see:
Scorpio Tankers: Stock Is A Buy But Risks Cannot Be Ignored