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TNK

Teekay Tankers NYSE:TNK Stock Report

Last Price

US$17.48

Market Cap

US$590.9m

7D

-5.2%

1Y

25.5%

Updated

04 Jul, 2022

Data

Company Financials +
TNK fundamental analysis
Snowflake Score
Valuation4/6
Future Growth3/6
Past Performance0/6
Financial Health3/6
Dividends0/6

TNK Stock Overview

Teekay Tankers Ltd. provides marine transportation services to oil industries in Bermuda and internationally.

Rewards

Trading at 64.5% below our estimate of its fair value

Earnings are forecast to grow 106.95% per year

Risk Analysis

No risks detected for TNK from our risk checks.

Teekay Tankers Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Teekay Tankers
Historical stock prices
Current Share PriceUS$17.48
52 Week HighUS$22.10
52 Week LowUS$9.89
Beta-0.25
1 Month Change-16.56%
3 Month Change22.50%
1 Year Change25.49%
3 Year Change68.08%
5 Year Change26.30%
Change since IPO-89.08%

Recent News & Updates

Jul 05

Teekay Tankers: A More Positive Outlook For 2022

Teekay Tankers announced a total adjusted net loss of $14.00 million, or $0.41 per share, during the first quarter, decreasing from a loss of $22.00 million, or $0.65 per share. The business outlook is turning slightly bullish due to trade disruptions and the rerouting of cargoes following the war in Ukraine. I recommend buying TNK on any weakness below $17. Introduction The Bermuda-based Teekay Tankers Ltd. (TNK) released its first-quarter 2022 results on May 12, 2022. Important note: This article is an update of my article published on April 19, 2022. I have been following TNK on Seeking Alpha since 2021. 1 - 1Q22 Results Snapshot The company posted a quarterly adjusted loss of $0.41 per share compared to a loss of $0.65 per share a year ago. The results were slightly better than expected due to higher spot tanker rates. Net income is again a loss of $13.94 million compared to $21.37 million a year ago. TNK 1Q22 highlights Presentation (Teekay Tankers) CEO Kevin Mackay said in the conference call: Our results improved quarter-over-quarter were primarily due to higher spot tanker rates. We have maintained a focus on financial strength, supported by our recent attractive refinancings and vessel sales that have taken advantage of its firm asset market Teekay Tankers is now the last remaining subsidiary of the "Teekay group" after the company sold Teekay LNG to Stonepeak on January 22, 2022. 2 - Stock Performance As we can see below, TNK has done quite well in 2022 but is now retracing from its high in June. TNK is up 25% on a one-year basis. Data by YCharts 3 - Investment Thesis The investment thesis for TNK is always a strenuous exercise due to the inherent extreme volatility of the Tankers industry, and the rest of 2022 will not be different. However, the sector has turned around and may continue to perform well in 2022. After a slow start in 2022, the tankers industry experienced a notable spike in spot tanker rates late in 1Q22. This increase was driven primarily by the impact of the ongoing Ukraine conflict. The midsize tankers segment benefitted the most due to disruptions in oil trading patterns. TNK rates (TNK Presentation) TNK operates mainly in this segment and saw an increase in ton-mile demand, pushing higher rates (see table below). CEO Kevin Mackay said in the conference call: However, Russia's invasion of Ukraine in late February, led to an increase in tanker rates, particularly in the Aframax and Suezmax sectors due to trade disruptions and the rerouting of cargoes. The company said that this trend is continuing in the second quarter, and according to the Fearnleys Weekly Report end of June, the Tankers market is still doing reasonably well. In the presentation, the company indicated the 2Q22 to-date spot. TNK secured strong second quarter-to-date spot tanker rates of $27,400 per day for the Suezmax fleet, $30,900 per day for the Aframax fleet, and $30,400 per day for the LR2 fleet. TNK 2Q22 spot rates (Teekay Tankers) Because most of the company's vessels are trading in the spot market, TNK is well-positioned to generate strong cash flow in 2022. CEO Kevin Mackay said in the conference call: As shown by the chart on the right of the slide, crude oil exports from the US Gulf to Europe at the end of April were the highest since March 2020 with the vast majority being moved on Aframaxes and Suezmaxes. Due to the nature of the lot of regions involved and the need for greater flexibility and discharge options, midsized tankers have benefited more significantly from these changing trade patterns compared to VLCCs, where rates have remained relatively weak. The net impact of these changes has been a lengthening in average voyage distances and therefore higher ton-mile demand. Total fleet: Type 1Q21 1Q22 Suezmax 12,294 13,786 Aframax 15,679 18,037 LR2 12,223 15,491 Source: TNK release. In 1Q22, TNK completed the sale of three vessels built in 2004 and 2005 for approximately $44 million. It includes one 2005-built Aframax sold for roughly $15 million and two other vessels that were previously announced. TNK fleet is specialized in crude oil and refined petroleum products tankers. Below is the fleet status as of May 1, 2022. TNK Fleet status as of May 1, 2022 (Teekay Tankers) Segment Number of vessels Owned and leased vessels 46 Chartered-in vessels 5 Total 51 However, as we can see above, TNK is highly specialized, which increases stock volatility. Thus, I continue to recommend short-term trading LIFO and taking advantage of the market's wild swings. The best way to profit here is to trade about 65%-80% of your position short term and keep a small long-term holding for a much higher price target. The lack of dividends is also a deterrent. TNK - The Raw Numbers: First Quarter Of 2022 And Financials History Teekay Tankers 1Q21 2Q21 3Q21 4Q21 1Q22 Total Revenues in $ Million 142.75 123.42 115.89 160.31 174.02 Net Income in $ Million -21.37 -129.14 -52.06 -39.81 -13.94 EBITDA $ Million 15.96 -95.07 -18.31 -5.77 18.48 EPS diluted in $/share -0.63 -3.83 -1.54 -1.17 -0.41 Operating cash flow in $ Million -27.45 -18.26 -38.40 -23.21 -14.67 CapEx in $ Million 0.91 6.32 7.93 6.28 4.07 Free Cash Flow in $ Million -28.36 -24.58 -46.33 -29.48 -18.74 Total Cash $ Million 87.60 60.50 60.72 50.57 18.37 Total Debt (including current) In $ Million 599.7 596.4 631.3 634.4 607.20 Shares Outstanding (Diluted) in Million 33.74 33.76 33.90 33.90 33.91 Source: Teekay Tankers release Note: More data are available to subscribers only. Analysis: Revenues, Earnings Details, Free Cash Flow 1 - Operating revenues were $174.02 million in 1Q22 TNK Quarterly Revenues history (Fun Trading) Teekay Tankers announced a total adjusted net loss of $14.00 million, or $0.41 per share, during the first quarter, decreasing from a loss of $22.00 million, or $0.65 per share, in the first quarter of 2021. Revenues were $174.02 million in 1Q22, up from $142.75 million in 1Q21.

Shareholder Returns

TNKUS Oil and GasUS Market
7D-5.2%-1.7%-2.2%
1Y25.5%28.8%-19.1%

Return vs Industry: TNK underperformed the US Oil and Gas industry which returned 28.8% over the past year.

Return vs Market: TNK exceeded the US Market which returned -21.2% over the past year.

Price Volatility

Is TNK's price volatile compared to industry and market?
TNK volatility
TNK Average Weekly Movement9.4%
Oil and Gas Industry Average Movement8.9%
Market Average Movement8.1%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.3%

Stable Share Price: TNK is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: TNK's weekly volatility (9%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20071,900Kevin Mackayhttps://www.teekay.com/business/tankers

Teekay Tankers Ltd. provides marine transportation services to oil industries in Bermuda and internationally. The company offers voyage and time charter services; and offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products, as well as liquid gases and various other products. It also provides tanker commercial and technical management services.

Teekay Tankers Fundamentals Summary

How do Teekay Tankers's earnings and revenue compare to its market cap?
TNK fundamental statistics
Market CapUS$590.91m
Earnings (TTM)-US$234.95m
Revenue (TTM)US$573.64m

1.0x

P/S Ratio

-2.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TNK income statement (TTM)
RevenueUS$573.64m
Cost of RevenueUS$524.75m
Gross ProfitUS$48.89m
Other ExpensesUS$283.84m
Earnings-US$234.95m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-6.95
Gross Margin8.52%
Net Profit Margin-40.96%
Debt/Equity Ratio18.1%

How did TNK perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is TNK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TNK?

Other financial metrics that can be useful for relative valuation.

TNK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.1x
Enterprise Value/EBITDA-58.1x
PEG Ration/a

Price to Sales Ratio vs Peers

How does TNK's PS Ratio compare to its peers?

TNK PS Ratio vs Peers
The above table shows the PS ratio for TNK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average2x
NAT Nordic American Tankers
2.2x18.1%US$417.5m
KNOP KNOT Offshore Partners
2.2x4.1%US$590.1m
SRLP Sprague Resources
0.1xn/aUS$498.2m
DHT DHT Holdings
3.6x17.2%US$1.0b
TNK Teekay Tankers
1x-7.2%US$590.9m

Price-To-Sales vs Peers: TNK is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (2x).


Price to Earnings Ratio vs Industry

How does TNK's PE Ratio compare vs other companies in the US Oil and Gas Industry?

Price-To-Sales vs Industry: TNK is good value based on its Price-To-Sales Ratio (1x) compared to the US Oil and Gas industry average (1.8x)


Price to Sales Ratio vs Fair Ratio

What is TNK's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TNK PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1x
Fair PS Ratio0.4x

Price-To-Sales vs Fair Ratio: TNK is expensive based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (0.4x).


Share Price vs Fair Value

What is the Fair Price of TNK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TNK ($17.48) is trading below our estimate of fair value ($49.21)

Significantly Below Fair Value: TNK is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TNK's PEG Ratio to determine if it is good value.


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Future Growth

How is Teekay Tankers forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


107.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: TNK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TNK is expected to become profitable in the next 3 years.

Revenue vs Market: TNK's revenue is expected to decline over the next 3 years (-7.2% per year).

High Growth Revenue: TNK's revenue is forecast to decline over the next 3 years (-7.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TNK's Return on Equity is forecast to be low in 3 years time (11.5%).


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Past Performance

How has Teekay Tankers performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-21.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TNK is currently unprofitable.

Growing Profit Margin: TNK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TNK is unprofitable, and losses have increased over the past 5 years at a rate of 21.2% per year.

Accelerating Growth: Unable to compare TNK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TNK is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (102.2%).


Return on Equity

High ROE: TNK has a negative Return on Equity (-28.48%), as it is currently unprofitable.


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Financial Health

How is Teekay Tankers's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: TNK's short term assets ($231.1M) exceed its short term liabilities ($183.8M).

Long Term Liabilities: TNK's short term assets ($231.1M) do not cover its long term liabilities ($574.1M).


Debt to Equity History and Analysis

Debt Level: TNK's net debt to equity ratio (15.8%) is considered satisfactory.

Reducing Debt: TNK's debt to equity ratio has reduced from 90.8% to 18.1% over the past 5 years.

Debt Coverage: TNK's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if TNK's interest payments on its debt are well covered by EBIT.


Balance Sheet


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Dividend

What is Teekay Tankers's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate TNK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TNK's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TNK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TNK's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: TNK is not paying a notable dividend for the US market.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as TNK has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average board tenure


CEO

Kevin Mackay (53 yo)

8.08yrs

Tenure

Mr. Kevin J. Mackay has been the Chief Executive Officer and President of Teekay Tankers Ltd. since June 20, 2014. Mr. Mackay joined Teekay in 2014.He has extensive years’ experience in the marine energy...


Board Members

Experienced Board: TNK's board of directors are considered experienced (3.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Teekay Tankers Ltd.'s employee growth, exchange listings and data sources


Key Information

  • Name: Teekay Tankers Ltd.
  • Ticker: TNK
  • Exchange: NYSE
  • Founded: 2007
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Implied Market Cap: US$590.907m
  • Shares outstanding: 33.80m
  • Website: https://www.teekay.com/business/tankers

Number of Employees


Location

  • Teekay Tankers Ltd.
  • Belvedere Building
  • 4th Floor
  • Hamilton
  • Ontario
  • HM 08
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/07/04 00:00
End of Day Share Price2022/07/01 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.