Position in Teekay Tankers Increased

By on June 25, 2020

Teekay Tankers YTD ChartDaily rates have dropped faster than expected in the oil tanker business which has led to disastrous performance by the company’s stocks in this business. Teekay Tankers (TNK) is a large oil tanker operator and its stock has swooned approximately 50% from the highs only two months ago.

Various talking heads covering this industry say a supercycle is on the way beginning in the timeframe of 2022-2023 due to low order books of replacement ships. Ships typically have a useful life of approximately 20 years. This should support stronger rates in a couple of years.

I have decided to increase the position in TNK at these apparently depressed levels. TNK was purchased this morning at $12.35 and the allocation was increased in the SMA Portfolio from 1.7% to 2.2%.

Disclaimer: It is very challenging to outperform a buy and hold strategy. Historically, investors have found themselves well-served over the long-term by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. All investors are advised to conduct their own independent research into individual stocks, closed-end funds, mutual funds, and exchange traded funds or any other investment vehicle before making a purchase decision. In addition, investors are advised that past performance has demonstrated no relation to future performance. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented.

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