24/7 Wall St. » FRO

Tanker Rates Falling, Profits Disappear (NAT, TK, FRO, TNK, TNP)

Paul Ausick — Mon, 11 Feb 2013 16:05:26 +0000

When Nordic American Tankers Ltd. (NYSE: NAT) reported results this morning, the company started out by saying that it had “improved its relative position within the industry despite a weak market.” The company’s quarterly net loss came in at $0.39 per share against a consensus estimate for a net loss of $0.36 per share. The loss does not include a $0.22 per share impairment charge.

This is not just a problem for Nordic. Other tanker operators, including Frontline Ltd. (NYSE: FRO), TeeKay Corp. (NYSE: TK), Teekay Tankers Ltd. (NYSE: TNK) and Tsakos Energy Navigation Ltd. (NYSE: TNP), have suffered as well. Overseas Shipholding Group, the largest U.S. tanker operator, filed for bankruptcy protection in November.

These crude oil shippers have been hit with declining demand for crude and an oversupply of vessels. The combined impact has produced an average daily rate for Nordic of just $10,700 during the fourth quarter, compared with a break-even average of around $12,000. Nordic, which operates a fleet of Suezmax vessels capable of carrying 1 million barrels each, is probably a little better off than companies sailing the largest tankers — VLCCs that carry about twice the oil of the Suezmaxes — and that last week were seeing rates below $10,000 a day. The VLCC fleet is expected to grow by more than 5% in 2013, probably the last thing the industry needs.

Nordic expects the global Suezmax fleet to grow by 54 vessels in 2013, but only five are currently scheduled for delivery in 2014. The company also noted that scrapping increased in 2012 and it expects another increase in 2013.

Investors have not deserted the shippers though, primarily because most pay significant dividends. Nordic’s dividend yield is 7.3%, Tsakos pays 5%, TeeKay pays 3.5% and TeeKay Tankers pays 2.9%. Only Frontline currently pays no dividend. TeeKay is the only one of these companies that has posted share price growth in the past 12 months, with shares up nearly 35%. The rest are down between 30% and 40% from their year-ago prices.

Are decent dividends enough to keep investors interested? Nordic’s shares are down only about 1% today, at $8.75 in a 52-week range of $8.15 to $16.04. The consensus price target on Nordic’s shares is around $9.10, which leaves an upside potential of just 4%.

Filed under: 24/7 Wall St. Wire, Services, Transportation Tagged: FRO, NAT, TK, TNK, TNP

Dry Bulk Shippers Pin Hopes on Iron Ore, China

Paul Ausick — Fri, 04 Jan 2013 17:01:27 +0000

Shares of a host of shipping companies are getting a big boost today on a report from Bloomberg that the 2013 outlook for shipping rates, especially for iron ore, are set to rise substantially during the year. Another way of putting it is that rates have nowhere to go but up.

Eagle Bulk Shipping Inc. (NASDAQ: EGLE) leads today’s charge, up nearly 38%. That would be phenomenal if the shares weren’t still nearly 70% below their 52-week highs. Other shippers getting a boost today include DryShips Inc. (NASDAQ: DRYS), up 19%; Excel Maritime Carriers Ltd. (NYSE: EXM), up almost 26%; Frontline Ltd. (NYSE: FRO), up nearly 10%; Genco Shipping & Trading Ltd. (NYSE: GNK), up nearly 7%; and Diana Shipping Inc. (NYSE: DSX), up about 5.5%.

The main measure of dry bulk shipping rates, the Baltic Dry Index, closed 2012 at just under 700, more than 50% below where it started the year. Lower demand from China for iron ore gets a lot of the blame.

But demand — and price — for iron ore has picked up in China, and is expected to remain higher at least temporarily. Or perhaps we should say, at most temporarily. Iron ore prices have risen to above $140 a metric ton (tonne) from below $88 a tonne in September.

The contributing factor is iron ore production. Many of the big mining companes like Vale SA (NYSE: VALE), Rio Tinto plc (NYSE: RIO), and BHP Billiton Ltd. (NYSE: BHP) have cut production in the face of lower prices and higher costs. Bringing new production on line to meet rising demand slowed but never stopped, and growth will continue this year, pushing down prices.

That may be good news for the dry bulk shippers who will benefit if ore prices remain low and demand from China grows. The big question is how long the spurt will last.

Filed under: 24/7 Wall St. Wire, China, Commodities & Metals, Transports Tagged: BHP, DRYS, EGLE, EXM, FRO, GNK, RIO, VALE

Seadrill to Spin-off Drilling Company (SDRL, CVX, TOT, BP, XOM, GLNG, GMLP, FRO)

Paul Ausick — Fri, 21 Sep 2012 16:40:02 +0000

Offshore drilling services firm Seadrill Ltd (NYSE: SDRL) is spinning off its offshore rig business to a new company to be called Seadrill Partners LLC. If a filing with the SEC, Seadrill Partners said it will seek $225 million in a public offering at a yet-to-be-determined date. The company did not say how many shares would be offered, but did say the firm would trade on the NYSE under the ticker symbol ‘SDLP’.

Seadrill Partners said it is an “emerging growth company” that currently has long-term contracts with oil majors Chevron Corp. (NYSE: CVX), Total SA (NYSE: TOT), BP plc (NYSE: BP), and Exxon Mobil Corp. (NYSE: XOM). Seadrill is majority owned by the Fredriksen Group, which also owns majority interests in Golar LNG Ltd. (NASDAQ: GLNG), Golar LNG Partners LP (NASDAQ: GMLP), and Frontline Ltd. (NYSE: FRO).

Seadrill Ltd. will own 70% of the common units of Seadrill Partners following the IPO. The new company also plans “to make accretive acquisitions of drilling rigs from Seadrill and third parties” under an agreement that will give Seadrill Partners a first right to purchase additional interests in a jointly owned operating company and “a right to purchase any drilling rigs acquired or placed under contracts of five or more years after the closing date of this offering.”

According to the filing, Seadrill Partners will use the proceeds from the filing “as consideration for the acquisition of our interest in [the jointly owned operating company] from Seadrill.”

Citigroup is the sole underwriter of the offering.

The S-1 filing is available here.

Paul Ausick

Filed under: 24/7 Wall St. Wire, IPOs, Oil & Gas Tagged: BP, CVX, FRO, GLNG, GMLP, SDRL, TOT, XOM

Shipper Prices Share Offering; Watch Shares Sink (EGLE, DRYS, EXM, GNK, DSX, FRO, NM, RBS, SAN)

Paul Ausick — Tue, 26 Jun 2012 12:31:43 +0000

Dry bulk shipper Eagle Bulk Shipping Inc. (NASDAQ: EGLE) filed a Form S-3 with the SEC this morning announcing the sale of up to 3.15 million shares of common stock priced at $2.84. Shares closed at $3.14 last night, working out to a discount of nearly 10% for today’s offering.

Rising fuel costs and a slowing global economy has hit the dry bulk shippers hard. Cargoes of iron ore and coal have decreased, and day rates all but collapsed at one point. The Baltic Dry Index has recently come back to nearly 1,000, although that’s still very low, and fuel costs have moderated somewhat. Shippers like DryShips Inc. (NASDAQ: DRYS), Excel Maritime Carriers, Ltd. (NYSE: EXM), Genco Shipping & Trading Ltd. (NYSE: GNK), Diana Shipping Inc. (NYSE: DSX), Frontline Ltd. (NYSE: FRO), and Navios Maritime Holdings Inc. (NYSE: NM) have all lost at least 67% of their value in the past five years and all are down -32% or more for the past 12 months.

The shares are being sold for current shareholders and Eagle will receive no proceeds from the sale. The shares on offer were issued on June 20th to warrant holders at a strike price of $0.01. According to the filing:

One-third of the warrants are exercisable immediately, the next third when our stock price reaches $10.00 per share (subject to certain customary adjustments in the event of stock splits, reverse stock splits and certain distributions to all holders of common stock) and the last third when our stock price reaches $12.00 per share (subject to the aforementioned adjustments). Unexercised Warrants expire on June 20, 2022.

Sellers include the Royal Bank of Scotland plc (NYSE: RBS) and a branch of Spain’s Banco Santander S.A. (NYSE: SAN), among others.

Shares of Eagle fell -13% yesterday to close at $3.14 in a 52-week range of $2.51-$11.00. Shares are down -2.6% in the pre-market this morning, at $3.06.

The full filing is available here.

Paul Ausick

Filed under: IPOs & Secondaries, Secondary Offering, Transportation, Transports Tagged: DRYS, DSX, EGLE, EXM, FRO, GNK, NM, RBS, SAN

Crude Tanker Rates to Rise on OPEC Decision (FRO, SFL, NAT, OSG, TNK, TNP)

Paul Ausick — Wed, 20 Jun 2012 16:42:19 +0000

Last week’s decision by OPEC to continue to produce crude oil at the cartel’s official quota level of 30 million barrels/day had the knock-on effect of emboldening tanker operators to raise shipping rates for the very-large crude carriers (VLCCs) that haul 2 million barrels of crude. Third-quarter rates will average $18,000/day, according to a report at Bloomberg News, up from a low of about $9,700/day in the second quarter.

Tanker companies included Frontline Ltd. (NYSE: FRO), Ship Finance International Ltd. (NYSE: SFL), Nordic American Tankers Ltd. (NYSE: NAT), Overseas Shipholding Group Inc. (NYSE: OSG), Teekay Tankers Ltd. (NYSE: TNK), and Tsakos Energy Navigation Ltd. (NYSE: TNP) are all expected to benefit as demand for VLCCs to carry all that Middle East production to Asia is expected to outstrip the availability of the vessels.

There is even better news for shippers. The drop in crude prices has not been followed by a similar drop in prices for refined products. That means that more crude will be refined and sent by ship to buyers. More demand equal higher prices for refined products cargoes.

More demand for tankers as floating storage may also emerge if prices for crude continue to be depressed. Filling a VLCC and driving it in circles can be profitable in a market where futures prices are higher than current spot prices, as they currently are.

In the past 12 months, share prices for tanker companies have fallen anywhere from around -13% at Ship Finance to -72% at Frontline. Since January, all except Overseas have moved to share price gains, led by Ship Finance with a jump of 63%, followed by Teekay Tankers, up 24%, and Nordic American up 12%. Even Frontline has managed to return to positive territory, up more than 5% since the beginning of the year.

To appreciate how far the market for VLCCs has fallen, it’s worth remembering that in 2007, the day rate for one of these brutes was $227,000. The market has a long way to go before those rates return.

Paul Ausick

Filed under: Commodities, Commodities & Metals, International Markets, Oil & Gas Tagged: FRO, NAT, OSG, SFL, TNK, TNP

24/7 Wall St. Closing Bell — May 25, 2012 (EBAY, LULU, SI, CRM, FSLR, CRMT, MENT, POST, FRO, AMSC, DRYS, KUTV, SAFM, SHIP, GAME, TLB, PAY, FB)

Paul Ausick — Fri, 25 May 2012 18:04:01 +0000

Today’s edition of the Closing Bell is being published shortly after 2:00 p.m. US markets are closed Monday to observe the Memorial Day holiday. We’ll resume our normal schedule next Tuesday.

The three major US stock indexes opened marginally higher this morning as more European countries come out in support of a eurobond, a proposal Germany has flatly declined to discuss. The impasse weighed on European markets and the weight crossed the Atlantic when US markets opened today. The only new data point in the US today was better-than-expected reading on Reuters/University of Michigan consumer sentiment index (our coverage here). The US dollar index rose today, now up 0.07% at 82.406. The GSCI commodity index is up fractionally at 618.78, with commodities prices mixed. WTI crude oil is trading up 0.12% at $90.77/barrel, and Brent crude trades up 0.31% at $106.88/barrel. Natural gas fell -4.4% today to $2.53/thousand cubic feet. Gold is trading up 0.52% today, at $1,567.90/ounce.

At 2:00 p.m. ET, the DJIA is down about 45 points at 12,484.68 (-0.36%), the NASDAQ is up more than 3 points (0.12%) at 2,842.72, and the S&P 500 is down -0.02% or less than 1 point at 1,320.43.

There were several analyst upgrades and downgrades today, including Ebay Inc. (NASDAQ: EBAY) maintained as ‘buy’ with a target price of $44 at BofA/ML; Lululemon Athletica (NASDAQ: LULU) cut to ‘hold’ at KeyBanc; Siemens AG (NYSE: SI) raised to ‘buy’ at Deutsche Bank; Salesforce.com (NYSE: CRM) raised to ‘outperform’ at Oppenheimer; and First Solar Inc. (NASDAQ: FSLR) maintained as ‘buy’ with a target price of $30 at BofA/ML.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: America’s Car-Mart Inc. (NASDAQ: CRMT) is down -7.8% at $41.52; Mentor Graphics Inc. (NASDAQ: MENT) is down -12.7% at $13.28; Post Holdings Inc. (NYSE: POST) is up 6.8% at $29.89; and Frontline Ltd. (NYSE: FRO) is up 8.8% at $5.42.

On Tuesday, we are scheduled to get earnings reports from American Superconductor Corp. (NASDAQ: AMSC), DryShips Inc. (NASDAQ: DRYS), Ku6 Media Co. Ltd. (NASDAQ: KUTV), Sanderson Farms Inc. (NASDAQ: SAFM), Seanergy Maritime Holdings Group Corp. (NASDAQ: SHIP), and Shanda Games Ltd. (NASDAQ: GAME).

We’ve also reviewed this week some potential value stocks among major oil companies, gold & silver miners, conglomerates, industrials, retail, semiconductor, and solar stocks.

Other standouts from today include the following stocks:

The Talbots Inc. (NYSE: TLB) is down -38.9% at $1.57. The clothing retailer failed to reach a deal with a potential private equity buyer.

Verifone Systems Inc. (NYSE: PAY) is down -15% at $38.27. The electronic payment systems company forecast a weaker-than-expected third quarter.

Facebook Inc. (NASDAQ: FB) is down -3.8% at $31.78. The social network company continues to seek a floor for its stock price.

Stay tuned for Tuesday. US markets are closed Monday to observe the Memorial Day holiday. We have also noted the following events on the schedule for Tuesday (all times Eastern):

9:00 a.m. – S&P Case-Schiller housing price index
10:00 a.m. – Conference Board consumer confidence survey
10:00 a.m. – State Street investor confidence index
10:30 a.m. – Dallas Fed manufacturing survey
11:30 a.m. – 3- and 6-month bill auction

Have a great long weekend.

Paul Ausick

Filed under: Active Trader, HI/LOW, Market Close Tagged: AMSC, CRM, CRMT, DRYS, EBAY, FB, FRO, FSLR, GAME, KUTV, LULU, MENT, PAY, POST, SAFM, SHIP, SI, TLB

24/7 Wall St. Closing Bell — May 24, 2012 (HPQ, ARMH, DUK, NOV, MET, FRED, HNZ, TIF, COST, TD, CRMT, MENT, POST, FRO, JDAS, NTAP, ROSG, P)

Paul Ausick — Thu, 24 May 2012 20:05:29 +0000

The three major US stock indexes opened lower this morning following a weak report on Chinese and German PMI readings (our coverage here and here). New US jobless benefits claims came in pretty much as expected and Kansas City Fed manufacturing data significantly beat estimates. Tech stocks soured the Nasdaq today and weighed on the other indexes as well. The US dollar index rose today, now up 0.27% at 82.318. The GSCI commodity index is down about 2% at 625.52, with commodities prices mixed. WTI crude oil closed up 0.9% at $90.66/barrel, staunching a two-day slide, and Brent crude trades up 0.92% at $106.53/barrel. Natural gas fell -3.3% today to $2.647/thousand cubic feet, following another inventory build (our coverage here). Gold settled up 0.6% today, at $1,557.60/ounce.

The unofficial closing bells put the DJIA up nearly 34 points to 12,530.91 (0.27%), the NASDAQ fell nearly 11points (-0.38%) to 2,839.38, and the S&P 500 rose 0.14% or nearly 2 points to 1,320.73.

There were several analyst upgrades and downgrades today, including Hewlett-Packard Co. (NYSE: HPQ) maintained as ‘neutral’ but estimates raised at Credit Suisse; ARM Holdings plc (NASDAQ: ARMH) raised to ‘buy’ at S&P; Duke Energy Corp. (NYSE: DUK) raised to ‘buy’ at UBS; National Oilwell Varco (NYSE: NOV) raised to ‘buy’ at SocGen; and MetLife Inc. (NYSE: MET) raised to ‘buy’ with a target price of $46 at Argus.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Hewlett-Packard is up 3% at $21.72 (more coverage here); Fred’s Inc. (NASDAQ: FRED) is down -2.5% at $14.05; H.J. Heinz Co. (NYSE: HNZ) is down -0.8% at $53.41; Tiffany & Co. (NYSE: TIF) is down -7.5% at $57.17 after posting a new 52-week low of $55.75 earlier today (more coverage here); Costco Wholesale Corp. (NASDAQ: COST) is up 1% at $84.16 (more coverage here); and The Toronto-Dominion Bank (NYSE: TD) is down -0.3% at $76.54.

Tomorrow we are scheduled to get earnings reports from America’s Car-Mart Inc. (NASDAQ: CRMT), Mentor Graphics Inc. (NASDAQ: MENT), Post Holdings Inc. (NYSE: POST), Frontline Ltd. (NYSE: FRO), and JDA Software Group Inc. (NASDAQ: JDAS).

We’ve also reviewed some potential value stocks among major oil companies, gold & silver miners, conglomerates, industrials, retail, and semiconductor stocks.

Other standouts from today include the following stocks:

Rosetta Genomics Inc. (NASDAQ: ROSG) is up nearly 52% at $17.07. The medical device maker is still booming on last week’s announcement that treatment would be covered by Medicare.

Pandora Media Inc. (NYSE: P) is up 12.5% at $11.62. The Internet radio company reported better-than-expected results last night. More coverage here.

Stay tuned for Friday. Philadelphia Fed President Charles Plosser is giving a speech. We have also noted the following events on the schedule (all times Eastern):

9:55 a.m. – Reuters/University of Michigan consumer sentiment index

Paul Ausick

Filed under: Active Trader, HI/LOW, Market Close Tagged: ARMH, COST, CRMT, DUK, FRED, FRO, HNZ, HPQ, JDAS, MENT, MET, NOV, NTAP, P, POST, ROSG, TD, TIF

Top Analyst Upgrades & Downgrades (ACN, MDRX, BLK, FMCN, FRO, HD, NRGY, JAH, KMI, LNKD, L, MU, OPEN, ORCL, RGLD, USB)

Jon C. Ogg — Wed, 21 Mar 2012 12:20:54 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Wednesday morning.

Accenture plc (NYSE: ACN) Raised to Hold at Soc-Gen.

Allscripts Healthcare Solutions (NASDAQ: MDRX) Cut to Neutral at JPMorgan.

BlackRock Inc. (NYSE: BLK) Cut to Equal Weight at Morgan Stanley.

Focus Media Holding Limited (NASDAQ: FMCN) Raised to Overweight at JPMorgan.

Frontline Ltd. (NYSE: FRO) Cut to Underperform at Wells Fargo.

Home Depot Inc. (NYSE: HD) Reiterated Outperform and raised target to $55 at Credit Suisse.

Inergy L.P. (NYSE: NRGY) Started as Outperform at Credit Suisse.

Jarden Corporation (NYSE: JAH) named as Value stock of the day at Zacks.

Kinder Morgan. Inc. (NYSE: KMI) Raised target price to $36 from $32 at Credit Suisse.

LinkedIn Corporation (NYSE: LNKD) Raised to Buy at Goldman Sachs.

Loews Corporation (NYSE: L) named Bear of the Day at Zacks.

Micron Technology, Inc. (NASDAQ: MU) Started as Outperform at RBC.

OpenTable, Inc. (NASDAQ: OPEN) Raised to Buy at Benchmark.

Oracle Corporation (NASDAQ: ORCL) Raised estimates and maintained on Focus List at Credit Suisse.

Royal Gold, Inc. (NASDAQ: RGLD) Raised to Outperform at National Bank.

U.S. Bancorp (NYSE: USB) named as Bull of the Day at Zacks.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: ACN, BLK, FMCN, FRO, HD, JAH, KMI, L, LNKD, MDRX, MU, NRGY, OPEN, ORCL, RGLD, USB

Demand Rising for Oil Tankers (FRO, NAT, TK)

Paul Ausick — Thu, 15 Mar 2012 14:41:32 +0000

The CEO of Frontline Ltd. (NYSE: FRO) told Reuters that the demand for oil tankers is unexpectedly high right now as imports to China swell. This could be good news for other tanker lines like Nordic American Tankers Ltd. (NYSE: NAT) and Teekay Corp. (NYSE: TK).

Saying that Frontline is “seeing an incredible amount” of contracts from the Persian Gulf, day rates have risen to $25,000-$30,000. That’s better than a doubling in just over a week.

The sudden jump in cargoes could be due to escalating tensions between Europe and Iran, with China taking Iranian crude at a lower price and adding to its inventories before the full effect of the sanctions hits Iran later this year.

Frontline’s shares are up nearly 7.5% at $5.90 in a 52-week range of $2.52-$25.09. Nordic American shares have jumped more than 5% to $14.41 in a 52-week range of $11.58-$25.89, and Teekay shares are up just over 1% at $30.62 in a 52-week range of $20.67-$37.93.

Paul Ausick

Filed under: Oil & Gas, Transportation, Transports Tagged: FRO, NAT, TK

Can Transport Stocks Deliver On Dow Theory? (UAL, LUV, CSX, NSC, JBHT, LSTR, NAT, FRO)

Paul Ausick — Thu, 01 Mar 2012 19:50:03 +0000

The Dow Jones Transportation Average has risen just 7.7% in the past five years, and barely 3% in the past 12 months. Not exciting, that’s for sure, except for the ride to get here.

Fortunately there are no shipping stocks included in the average or it could have been even more thrilling. The Baltic Dry Index has fallen by -44% in the past 12 months as new ships have flooded the market and cargoes have dwindled due to a slower economy.

We’ve looked at eight companies in the transportation business to see if there is any value to be gained here: airlines United Continental Holdings Inc. (NYSE: UAL) and Southwest Airlines Co. (NYSE: LUV); railroads CSX Corp. (NYSE: CSX), Norfolk Southern Corp. (NYSE: NSC); truckers JB Hunt Transport Services Inc. (NASDAQ: JBHT) and Landstar System Inc. (NASDAQ: LSTR); and shipping companies North American Tankers Ltd. (NYSE: NAT) and Frontline Ltd. (NYSE: FRO).

Over the past 12 months, only truckers JB Hunt and Landstar and rail carrier Norfolk Southern have been able to post share price gains. Hunt is up more than 28%, Landstar is up 27%, and Norfolk Southern is up about 7%.

United Continental Holdings Inc. (NYSE: UAL) has a consensus target price is $33.58 and the stock is trading today at around $20.80, for a potential gain of 61%. Airlines are generally the hardest and most immediately hit by increases in fuel costs. Despite that, United’s share price has gained slightly more than 10% since the beginning of the year.

Southwest Airlines Co. (NYSE: LUV) has a consensus target price of $12.46 and a current price of around $9.07, for a potential upside of 37%. Southwest’s share price is up more than 6% since the beginning of the year, though for the past 12 months it’s down more than -22%.

US rail traffic is down 0.3% year-over-year for the first two months of 2012. Container traffic is up 3.2% while truck trailer traffic is down -7.7%. In the last week of February, traffic was down -5%. None of this appears to bode well for either the railroads or the truckers.

CSX Corp. (NYSE: CSX) has a consensus target price of $27.20 and shares are trading today around $21.18, for a potential gain of 28%. CSX shares lost about -12.5% over the past 12 months but are up slightly since January.

Norfolk Southern Corp. (NYSE: NSC) has a consensus target price of $85.68 and a current price of $69.27, for a potential gain of 24%. The target price is virtually unchanged since December, but the share price has fallen by a $5/share. Norfolk Southern, one of our three gainers in the past 12 months, has lost more than -5% of its share price since January.

JB Hunt Transport Services Inc. (NASDAQ: JBHT) has a consensus target price of $54.48, and a current price of around $52.32, for a potential gain of just 4%. In December the target price was around $48, so Hunt’s target has been moving in the right direction and the stock price has kept pace. As fuel costs rise, though, Hunt could face some hard choices.

Landstar System Inc. (NASDAQ: LSTR) has a consensus target price of $56.94 and a current price of $55.41, for a potential upside of just 2.8%. The company’s target price in December was around $52, so, like Hunt, the target keeps moving up as does Landstar’s performance. Fuel costs could start trimming profits here too, though.

The shipping business has too many ships sailing around at unprofitable day rates. Until that situation resolves itself — not likely until 2013 — anything that resembles value in the shipping business is likely a mirage.

North American Tankers Ltd. (NYSE: NAT) has a consensus target price of $13.80 and current price of $14.22, indicating that the stock is fully valued.

Frontline Ltd. (NYSE: FRO) has a consensus target price of $5.83 and a current price of $5.50, for a potential gain of less than 1%. Frontline’s target price is essentially identical with it’s December target, when the stock was trading at less than $3/share.

Of the stocks reviewed here, JB Hunt has performed best for the past 12 months and is the leading performer since the beginning of this year, if you don’t count the shipping stocks. Both shipping stocks have larger gains, but they were down so far that any direction looks like up. Chasing the gains on either Nordic American or Frontline is almost purely speculative. JB Hunt, and to a lesser degree, Landstar, are the best bets here.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: CSX, FRO, JBHT, LSTR, LUV, NAT, NSC, UAL