Please ensure Javascript is enabled for purposes of website accessibility

Why Nordic American Tankers' Shares Popped 12.7% Today

By Travis Hoium – Jun 13, 2019 at 4:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could an attack on a tanker be good for tanker stocks?

What happened 

Shares of Nordic American Tankers Ltd (NAT 5.43%) jumped as much as 12.7% in trading Thursday after oil tankers were attacked in the Middle East. At 3:50 p.m. EDT, shares were still up 11.8%. 

So what

Two oil tankers were attacked in the Gulf of Oman, near the Strait of Hormuz, where one-third of the world's shipped oil travels. The attack sent oil prices higher, climbing more than 2% near the end of trading. 

Large tanker on open water.

Image source: Getty Images.

The attack sent investors in a mission to find companies that may benefit from rising oil prices or changes in energy markets. That's what sent shares higher today, not any fundamental change in the business. 

Now what

It's not at all clear that revenue or earnings for companies like Nordic American Tanker will rise because of this incident. I would pay more attention to the company's current net losses and the weak net margins currently being generated. I don't see a tanker attack as a long-term bullish sign and, despite the surge in shares today, I don't think this is a buying opportunity for long-term investors. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.