In this week’s Blue Harbinger Weekly, we provide a brief update on our shipping company holding (which has gained 33.7% since early November), recap links to our newest reports on Saratoga Investment Corp., Facebook, “Big Risks Facing the BDC Industry,” and our latest Blue Harbinger Watch List. And last, but not least, we’re excited about our new update on personal investment advisory and custom portfolio management services.
Tsakos Energy Navigation (TNP):
Tsakos is a provider of international seaborne crude oil and petroleum product transportation services, and we own it in our Blue Harbinger Income Equity Strategy. And if you remember from our November 13th “Post-Election Investment Opportunities” report, it was by far the worst year-to-date performer in our Blue Harbinger Income Equity portfolio. However, it’s gained more than 33% since early November, and we believe it has more room to run.
Important for investors to recognize, Tsakos adjusts its dividend policy somewhat regularly, and it announced it will be lowering its next quarterly dividend from $0.08 per share to $0.05 per share. For reference, the following chart provides some history on this company’s dividend fluctuations.
Worth noting, the market actually reacted very positively to the dividend cut announcement (the stock gained 20% in the days following the announcement), as the market seems to believe Tsakos is efficiently allocating its capital. Also, this next chart helps explain the positive prospects for Tskaos.
Specifically, oil demand has been rising, but prices haven’t yet kept pace as demand increases so too will the price, eventually. According to President and CEO, Nikolas Tsakos during the quarterly call:
“I would like to believe that this could be -- if the market continues to show the performance it has, this could be the lowest part of the dividend and then increasing.”
Another positive for Tsakos is its strong discount to its book value. Specifically, it trades at only 30% of its book value, as shown in the following chart.
Importantly, we continue to own Tsakos in our Income Equity portfolio even though the company recently cut its dividend, because the dividend is still relatively attractive at around 4%, the dividend continues to have significant upside potential (per the CEO’s comment above), and the large discount to book value provides significantly more upside for the stock.
We had a great interview with the CFO of big-dividend, small-cap, BDC Saratoga Investment Corp (SAR) this last week, and that full report is available here:
Our investment idea this week is Facebook. Specifically, we believe now is a great time to buy, and you can read that report here:
Here is a link to our report on some of the big risks currently facing the BDC industry:
Here is a link to our latest Watch List (below). We don’t own any of these dividend-payers, but we may add shares in the future if the market conditions are right.
Personal Investment Advisory & Custom Portfolio Management:
We are very excited about our latest update on portfolio management and investment advisory services, and you can read the latest in this recent note: