5-Star Stocks Poised to Pop: Tsakos Energy

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil and gas shipper Tsakos Energy Navigation (NYSE: TNP) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Tsakos' business and see what CAPS investors are saying about the stock right now.

Tsakos facts

Headquarters (Founded)

Athens, Greece (1993)

Market Cap

$580.1 million

Industry

Oil and gas storage and transportation

Trailing-12-Month Revenue

$555.4 million

Management

President/CEO Nikolas Tsakos
CFO Paul Durham

Return on Equity (Average, Past Three Years)

22.2%

Cash / Debt

$308.7 million / $1.48 billion

Dividend Yield

10.9%

Competitors

Frontline (NYSE: FRO)
BP (NYSE: BP)

CAPS Members Bullish on TNP Also Bullish on

General Electric (NYSE: GE)
Vale (NYSE: VALE)

CAPS Members Bearish on TNP Also Bearish on

Bank of America (NYSE: BAC)
Lennar (NYSE: LEN)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 749 members who have rated Tsakos believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars BigFatBEAR and JakilaTheHun, both of whom are ranked in the top 1% of our community.

Just three weeks ago, BigFatBEAR remained cautiously optimistic about Tsakos' use of leverage:

With a high yield and lots of profitability, I see only 1 reason to not green-thumb [Tsakos] immediately. … If ROE stays low, then perhaps the large debt would have been a bad gamble. However, I'm predicting ROE will be 20% in coming years, which means that more debt may be a good thing.

In a pitch from one day earlier, JakilaTheHun elaborates. Here's an excerpt:

Earnings and operating cash flows have historically been quite strong. EPS has been in the $4.50 - $5.50 range over the past three fiscal years. While that will probably drop for the current fiscal year, I don't know that it's going to completely fall off a cliff and turn negative, as the share price seems to indicate. …

The only bad thing I can see in their past performance is that Free Cash Flows haven't been overly impressive. This was largely because the entire industry was upgrading capacity during the boom years. We are now at the end of that era and free cash flows should improve in the future. In fact, for FY '08, free cash flows were around $2.25 per share, which definitely isn't bad when you consider the stock's current selling price.

What do you think about Tsakos, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!  

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.

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