August 11, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Overseas Shipholding Group (NYSE: OSG ) jumped 12% today in a curious move.
So what: First things first, competitor BW Maritime joined Frontline (NYSE: FRO ) in refusing cargo because rates for supertankers are too low. Not only that, but yesterday FBR Capital downgraded Overseas Shipholding from outperform to market perform.
Now what: Neither of these things seems like enough to make a stock pop, but shares of OSG are still down considerably over the past week and there could be a silver lining. If competitors are refusing extremely low rates, that may be enough to bring rates up enough for everyone in the tanker sector.
Or maybe that's wishful thinking, and we should run for the hills because of an oversupply of tankers. Yeah, that sounds better.
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