International Seaways Inc (INSW, Financial) recently experienced a daily loss of -3.4%, yet it has seen a 3-month gain of 5.64%. With a notable Earnings Per Share (EPS) of 12.97, investors are keen to determine whether the stock is fairly valued. This article delves into the valuation analysis of International Seaways (INSW), providing investors with a detailed examination of its current market position and intrinsic value.
Company Introduction
International Seaways Inc operates a significant fleet of oceangoing vessels, primarily transporting crude oil and petroleum products. With a diverse fleet that includes ULCC, VLCC, Suezmax, Aframax, and Panamax crude tankers, as well as LR1, LR2, and MR product carriers, International Seaways is a key player in the maritime shipping industry. The company's business is segmented into Crude Tankers and Product Carriers, reflecting its specialized operations. Currently, International Seaways' stock price stands at $46.61, with a GF Value of $44.94, suggesting a close alignment with its estimated fair value.
Summarize GF Value
The GF Value is a proprietary measure used to estimate the intrinsic value of a stock. It incorporates historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and future business performance estimates. When the stock price aligns closely with the GF Value Line, it is considered fairly valued. International Seaways (INSW, Financial), with a market cap of $2.30 billion, appears to be fairly valued, indicating that the long-term return of its stock is likely to mirror the rate of its business growth.
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Financial Strength
Investing in companies with solid financial strength is crucial to minimize the risk of permanent loss. International Seaways' cash-to-debt ratio of 0.25, though below the industry median, still reflects a fair financial condition with a strength rating of 6 out of 10. This rating is supported by the company's ability to cover its debts and sustain its operations.
Profitability and Growth
Profitability is a key indicator of a company's potential for long-term success. International Seaways has shown profitability in 2 out of the past 10 years, with impressive revenues of $1.20 billion and an operating margin that surpasses most of its industry peers. The company's fair profitability and growth prospects, with revenue and EBITDA growth rates outperforming a significant portion of the industry, paint a promising picture for investors.
ROIC vs WACC
Comparing a company's Return on Invested Capital (ROIC) with its Weighted Average Cost of Capital (WACC) provides insight into its profitability relative to the capital costs. International Seaways boasts a ROIC of 29.98, significantly higher than its WACC of 3.37, indicating efficient capital utilization and strong potential for investor returns.
Conclusion
International Seaways (INSW, Financial) presents itself as a fairly valued investment opportunity. The company's financial health and profitability are sound, and its growth outpaces a majority of competitors in the Oil & Gas industry. For an in-depth look at International Seaways' financials, investors can explore its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
