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Ship Finance International Shares Sank: What You Need to Know

By Travis Hoium - Updated Apr 6, 2017 at 5:31PM

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Is this meaningful or just another movement?

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 Ship Finance International (NYSE: SFL) fell as much as 19% today after fellow oil shipper Frontline (NYSE: FRO) said it may run out of cash next year.

So what: The news today isn't specific to Ship Finance International, but Frontline's bomb has hit all oil shippers. Overseas Shipholding Group (NYSE: OSG) is down 17% on the day, as investors jump ship from these oil shippers.

Now what: You can't say we didn't see this coming. Earlier this year, a new tanker was taken straight from the shipyard to a war lay-up, meaning there wasn't enough work to make operating the ship profitable.

Fellow fool Chris Barker warned of the glut of ships way back in 2009, and I warned that supertankers were sunk earlier this year. That stance certainly hasn't changed after today's news, and I would stay far away from any ship transporting oil at this point.

Interested in more info on Ship Finance International? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Stocks Mentioned

SFL Corporation Ltd. Stock Quote
SFL Corporation Ltd.
$10.56 (1.44%) $0.15
Frontline Ltd. Stock Quote
Frontline Ltd.
$11.44 (1.69%) $0.19
Overseas Shipholding Group, Inc. Stock Quote
Overseas Shipholding Group, Inc.
$2.69 (-1.47%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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