International Seaways is Tuesday's IBD Stock Of The Day, as the seaborne crude transporter advanced toward a buy point while oil demand uncertainty continues. INSW jumped in market trade.
The Marshall Islands-based corporation, which became an independent company in 2016, owns and operates a fleet of oceangoing vessels that transports crude oil and petroleum products. International Seaways operates a fleet of nearly 80 vessels and its customers include major independent and state-owned oil companies, oil traders, refinery operators and governments.
In 2021, International Seaways signed seven-year contracts with Shell for its three new very large crude carrier (VLCC) class tanker, powered by dual-fuel liquefied natural gas (LNG) engines.
U.S. crude oil prices fell 2.7% to below $84 per barrel Tuesday, as traders continue to weigh the supply situation around the Israel-Hamas war as well as broad demand questions. Meanwhile, U.S. natural gas prices hovered around $3 per million British thermal units.
Last week, average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased $2.32 to $16.50 per million British thermal units, down 49% vs. 2022, according to recent Energy Information Administration data. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands averaged $15.78 per British thermal unit last week, a 58% decline compared to last year.
International Seaways is expected to report third-quarter earnings in November. Analysts predict EPS to contract 28% to $1.66 with sales falling 8% to $217 million. In August, INSW reported better-than-expected earnings and revenue.
The company has also stressed investor returns. In the second quarter, INSW returned more than $190 million to shareholders in the first half of 2023 through dividends and share buybacks.
International Seaways Stock
INSW shares surged 3.5% to 46.58 Tuesday during market action in above average volume. The stock has gained 33% in 2023, outperforming the S&P 500 index. International Seaways stock has formed a giant cup-with-handle base with an official 48.40 buy point, according to MarketSmith.
However, investors could treat the handle as its own base. On a daily chart, INSW appears to be forging a handle from that base. After Tuesday trade, the Oct. 17 high of 46.95 could be used as an entry. International Seaways stock's relative strength line is also at its highest in several months at 94.
Keep in mind that the market is in a correction. That means it is a very risky time for investors to be moving into new stocks, even if they are breaking out past buy points.
In late September, BTIG analyst Gregory Lewis raised the firm's price target on International Seaways to 55, up from 45, maintaining a buy rating on the shares. Lewis told investors he expects increased seaborne product volumes later this year and continuing into 2024, which should support the ongoing product tanker upcycle.
International Seaways stock has a best-possible 99 Composite Rating. INSW shares have a 94 Relative Strength Rating and an 81 EPS Rating.
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