Author Topic: TRMD - TORM  (Read 1545 times)

keerthiprasad

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TRMD - TORM
« on: May 11, 2020, 07:24:00 PM »
Starting a new thread, since the previous one was light and the company has gone through restructuring since then.

TORM  is a clean tanker company that trades in the US and  Denmark.  It is lightly followed and 65% owned by Oaktree Capital. Relatively modern fleet, mostly MR's.

Q4 2019 the company booked at an average of 18,111 / day. In early March, the coverage for Q1 2020 was 87% at day 23,818/day. Company previously stated that for every +$5000 in average 2020 bookings, an additional 126M in cash flow would be generated. Clean tanker spot rates have since gone up considerably (spot LR2 rates have been above 100k/day, MR rates above 30k/day). Q1 will be very good and Q2 will be amazing. Keep in mind that bookings completed now while likely be spilling over into Q3.

A couple other pros:
trades at ~ 60% of NAV.
Small dividend.
Completed buybacks earlier this year.

Cons:
lightly followed
tanker valuations are volatile and don't always make sense.


« Last Edit: May 11, 2020, 08:51:58 PM by keerthiprasad »


keerthiprasad

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Re: TRMD - TORM
« Reply #1 on: May 14, 2020, 08:51:10 AM »
Q1 earnings today...

https://investors.torm.com/static-files/e0aa2d88-b236-48c5-a6b9-d564b3057085

Q1 earnings: 56.8M (EPS = 0.76)

Q2 covereage 69%  @ 29188 USD.  Expect ~30M increased cashflow for Q2 compared to Q1.

NAV - 1.041B (bk value/ share = 14.2 USD)

No major debt due until 2026

share price - 7.6
Mkt cap - 560M


Indicated on the call that return of cash to shareholders will be considered in August, as scheduled. Seem to prefer dividends but not ruling out buybacks. Company is cautious with cash and wont make any decisions until more long term clarity is available. Long term, the world product tanker fleet is ageing and the order book is very low. Many product tankers moved to crude last year too. Overall the supply/demand for product tankers is favorable long term.

At these prices, they could not make any money the second half of the year and it would still be cheap. I really hope they just do some buybacks. Portion not owned by oaktree = 200M USD.  It would not be hard to move the stock price with buybacks. At 60% of NAV, the cheapest boats to buy are their own!

gfp

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gfp

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Re: TRMD - TORM
« Reply #3 on: May 20, 2020, 10:13:26 AM »
keerthiprasad - or others that follow Torm closely - what occurred on April 21st?  Was there a newsletter article or something? 

bskptkl

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Re: TRMD - TORM
« Reply #4 on: May 20, 2020, 10:20:38 AM »
keerthiprasad - or others that follow Torm closely - what occurred on April 21st?  Was there a newsletter article or something?
It's also listed in Copenhagen - last price 54.9 DKK.
Someone might have been confused and entered a 55 bid in US markets?

keerthiprasad

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Re: TRMD - TORM
« Reply #5 on: May 20, 2020, 10:27:34 AM »
Its unclear. Tanker stocks were being pumped in several places (including reddit) around this time. Low float + a bunch of market orders?

gfp

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Re: TRMD - TORM
« Reply #6 on: May 20, 2020, 10:32:47 AM »
Thanks for the reply.  It looks like the type of thing we used to call the "Agora effect."  Someone must have pumped it.  I don't think it was an accident followed by millions of similar accidents.  Too bad - now all those weak traders are going to be hanging around till the last one gives up

keerthiprasad

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Re: TRMD - TORM
« Reply #7 on: May 20, 2020, 10:45:14 AM »
Thanks for the reply.  It looks like the type of thing we used to call the "Agora effect."  Someone must have pumped it.  I don't think it was an accident followed by millions of similar accidents.  Too bad - now all those weak traders are going to be hanging around till the last one gives up

Yeah I think the draw down of these traders has contributed to most tanker shares dropping over the last month.

keerthiprasad

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Re: TRMD - TORM
« Reply #8 on: May 21, 2020, 07:23:24 AM »
Looks like Oaktree added some shares recently -

https://www.sec.gov/Archives/edgar/data/1403525/000095014220001372/eh2000752_13da2-torm.htm

vs. previous 13d from 3/27/2020:
https://www.sec.gov/Archives/edgar/data/1403525/000095014220000934/eh2000548_13da1-torm.htm

Yes about a 1M shares. For reference Oaktree owns about 50M now. Remaining float is about 25M.

I don't really understand why this hasn't been taken private. I'm guessing having public shares gives it a valuation? The CEO recently mentioned that they are interested in maintaining liquidity in the public shares and that is a consideration with buybacks..

gfp

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Re: TRMD - TORM
« Reply #9 on: May 28, 2020, 06:13:23 AM »