Scorpio Bulkers Added and International Seaways Increased

By on April 30, 2020

Cold and LonelyAs part of my new focus on profiting from the resurgence of the oil tanker industry, Scorpio Bulkers (SALT) was added to the SMA Portfolio. The position in International Seaways (INSW) was increased from 1.3% to 4.0%. SALT was purchased at $26.60 and INSW was purchased at $26.89. SALT now represents 1.6% of the portfolio.

After SALT and INSW were purchased the prices of all oil tanker positions promptly collapsed. The timing could have been better. SALT, a dry bulk shipper, owns a substantial number of shares in Scorpio Tankers (STNG) which exposes it to the fluctuations of the tanker market.

Contango in the oil market, which was very wide, narrowed a bit during the day causing the sell-off in the tanker market. I believe this is a temporary setback, but I could be wrong. We are living in interesting times and the markets are behaving in an unusual manner. All predictions are meaningless. What I am fairly certain of, and is no secret, is that tanker companies will be making beaucoup money over the next few months allowing them to pay down debt, repurchase stock, and/or pay healthy dividends.

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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