When it comes to oil transportation, pipeline companies are attractive due to high yield and stable price performance, but tanker stocks have moved into technical leadership since the start of the year.
Top-performing tanker companies include TORM PLC (NASDAQ: TRMD), which broke out of a cup-shaped pattern on February 14. It's now up about 10% from a buy point north of $31.65.
TORM is worth putting on a watchlist, as it's currently trading below a recent high of $36.60. It's holding near its 10-day moving average. The stock may offer a new buy point if it continues to hold above short-term moving averages or even its medium-term 50-day line.
However, before jumping in, be aware: The company is due to report 2022 full-year results on March 16. As with any stock, a piece of unexpected news can potentially send the stock moving sharply in either direction.
TORM's revenue and earnings growth accelerated in the past three quarters, and Wall Street is eyeing earnings growth of 27% this year.
U.K.-based TORM has a market capitalization just shy of $2.6 billion, putting it at the intersection of small- and mid-cap territory. As such, it won't be the focus of much analyst coverage, as you can see using data compiled by MarketBeat. However, the two analysts who do put ratings on the stock agree on a "buy."
TORM is among tanker stocks making a big move lately, but it's far from the only standout within its industry. Other worthy contenders include:
These stocks are trading essentially in unison, as there's plenty of business to go around, given the industry's current state and the world.
It may sound callous, but industry analysts say the oil tankers benefit from Russia's war against Ukraine. Geopolitical events have long benefited particular industries while others suffered, with the pandemic offering perfect examples of each.
One development driving the boom in the tanker industry is the increase in global crude prices since its early 2020 lows. But the war caused the direct effect of reworking oil tankers' maritime routes, to avoid zones of conflict. In addition, sanctions have forced many nations to find alternatives to Russian oil.
As you've seen, many of the tanker stocks cleared bases, then rallied, and are now consolidating again. That can offer fresh buy points, but don't chase stocks if they once again go into rally mode.
Before you consider TORM, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and TORM wasn't on the list.
While TORM currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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