FRO  Frontline Ltd.

Exchange

NYSE

Sector

Transportation

Industry

Marine Transportation

Market Cap.

1.07B

Vuru Grade

23.11/100

Current Price

$6.82
-0.139 (-1.997%)

Company Metrics

  • P/E 6.502
  • P/S 1.492
  • P/B 0.779
  • EPS 1.049
  • Cash ROIC -4.86%
  • Cash Ratio 1.19
  • Dividend 0.4 / 5.72%
  • Avg. Vol. 1.16M
  • Shares 24.02M
  • Market Cap. 1.07B

Company Description

Frontline Ltd., through its subsidiaries, engages in the ownership and operation of oil tankers and oil/bulk/ore (OBO) carriers. It primarily transports crude oil, as well as raw materials, such as coal and iron ore. The company's very large crude carriers (VLCCs) primarily transport crude oil from the Middle East Gulf to the Far East, Northern Europe, the Caribbean, and the Louisiana Offshore Oil... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Why Frontline Ltd.'s Shares Popped 10% Today
Motley Fool - May 31, 2016
What: Shares of Frontline Ltd. (NYSE:FRO) jumped as much as 10% on Tuesday after the oil tanker company reported first-quarter earnings.
Frontline Stock Could Rebound to $10 - Barron's
DHT Holdings Board Unanimously Rejects Unsolicited Proposal from Frontline Ltd.
Yahoo Finance - Feb 5, 2017
HAMILTON, BERMUDA, February 5, 2017 - DHT Holdings, Inc. (DHT) today announced that its Board of Directors has unanimously rejected Frontline Ltd.'s (NYSE/OSE: FRO) unsolicited, non-binding, highly conditional proposal to acquire all of the ...
DHT Holdings rejected the acquisition proposal of Frontline - Maritime Herald
Momentum Stocks in Focus: DHT Holdings, (NYSE:DHT) , Mentor Graphics ... - NYSE Journal (press release)
Frontline Ltd. to Webcast Live at Maritime Investor Conference on October 11, 2016
PR Newswire (press release) - Oct 6, 2016
HAMILTON, Bermuda, Oct. 6, 2016 /PRNewswire/ -- Frontline Ltd. (NYSE: FRO / OSE: FRO) (the "Company" or "Frontline"), the world leader in the international seaborne transportation of crude oil, today announced that Robert Hvide Macleod, Chief Executive ...
Better Buy: Textainer Group Holdings Limited vs. Frontline Ltd.
Motley Fool - Jul 22, 2016
Let's set up a head-to-head comparison of two corporations that have been battered by inclement weather in the maritime shipping business: Textainer Group Holdings Limited (NYSE:TGH) and Frontline Ltd. (NYSE:FRO). Both offer attractive investment ...
Oil Tanker Owner Frontline Makes Hostile Bid for Rival DHT
Wall Street Journal - Jan 30, 2017
Norwegian shipping company Frontline Ltd. launched a $475 million takeover bid for rival DHT Holdings Ltd., seeking to expand its fleet of supersize oil tankers at a time that the industry is battling low rates.
Why Frontline Ltd. (NYSE:FRO) Can't Acquire DHT Holdings Inc (NYSE:DHT) - Market Exclusive
Why I Might Be Getting Rid Of My DHT - Seeking Alpha
Mounting Speculation Of Crude Tanker Consolidation
Seeking Alpha - Jan 1, 2017
In October Frontline announced that they had cancelled four VLCC orders with struggling shipyard STX Offshore & Shipbuilding Co.
Frontline Ltd (FRO) Settles Into New 52-Week Low on February 03 Session
Equities.com - Feb 3, 2017
Shares of Frontline Ltd (FRO) sank into a new 52-week low yesterday, and could be a company to watch at the open. The company's stock fell to as low as $6.70 yesterday after opening at $6.78.
Frontline Ltd.: FRO – Invitation to Q4 2016 Results Conference Call and Webcast
The Wall Street Transcript - Feb 21, 2017
Frontline Ltd.'s preliminary fourth quarter 2016 results will be released on Tuesday February 28, 2017 and a webcast and conference call will be held at 3:00 p.m.
Frontline Ltd. Price Volatility Hits A Plunging Low
CML News - Feb 8, 2017
This is a proprietary realized volatility rating created by Capital Market Laboratories (CMLviz) based on a large number of data interactions for Frontline Ltd. (NYSE:FRO) . We examine the little used gem of daily stock volatility over a 20-day and 30 ...
Frontline Ltd (NYSE:FRO) Is a Sinker
Live Trading News - Jan 30, 2017
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for FRO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate FRO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$6.82 Current Price

$-95.05 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$52.58 Book Price

Undervalued by 670.79%


Very Poor Cash Return on Invested Capital over the past 5 years

FRO has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

FRO has lost $4.86 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow -25.53M 54.07M -45.19M 10.42M -579.43M
divided by
Invested Capital 1.51B 1.36B 1.18B 563.86M 2.36B
Cash ROIC -1.69% 3.97% -3.84% 1.85% -24.58%

Very Poor Return on Equity over the past 5 years

FRO has shown an inability to deliver results for shareholders. This could be due to poor management, FRO operating in a highly competitive industry, or having a weak business in general.

FRO has generated a $64.98 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income -529.60M -83.78M -191.08M -171.66M 124.38M
divided by
Stockholders' Equity 200.98M 119.68M -26.95M -70.98M 1.45B
Return on Equity -263.50% -70.00% - - 8.60%

Mediocre Business Performance over the past 10 years

FRO isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

FRO has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 261.74M 208.04M 169.36M 151.47M -231.30M -25.53M 54.07M -45.19M 10.42M -579.43M

Strong Balance Sheet

FRO is financially strong with Current Assets covering Total Liabilities. It's in a fairly liquid position and dependent on the amount and saleability of any inventory; it may have the financial security to survive an economic downturn.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 222.26M 184.12M 250.96M 145.50M 228.12M 163.08M 140.99M 59.79M 69.73M 287.71M
Current Assets 1.11B 1.06B 821.36M 783.18M 587.76M 410.41M 392.03M 260.15M 233.24M 467.47M
Total Assets 4.59B 3.76B 4.03B 3.72B 3.80B 1.84B 1.69B 1.37B 962.18M 2.89B
Current Liabilities 443.92M 590.23M 710.93M 605.36M 503.58M 167.38M 186.62M 130.77M 328.59M 242.04M
Total Liabilities 3.92B 3.32B 3.33B 2.97B 3.05B 1.64B 1.57B 1.39B 1.03B 1.44B
Stockholder' Equity 668.56M 445.97M 702.22M 741.34M 747.13M 200.98M 119.68M -26.95M -70.98M 1.45B
Current Ratio 2.51 1.80 1.16 1.29 1.17 2.45 2.10 1.99 0.71 1.93
TL-to-TA 0.85 0.88 0.83 0.80 0.80 0.89 0.93 1.02 1.07 0.50

Low or No Reinvestment of Profits over the past 10 years

FRO has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to FRO operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings - - 45.40M 78.03M 83.72M -463.01M -545.77M -734.28M -897.21M 81.21M
Retained Earnings Growth - - - 71.86% 7.29% -653.06% -17.87% -34.54% -22.19% 109.05%

Highly Competitive Industry over the past 10 years

It's likely that FRO is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely FRO invests heavily in R&D and Sales, General & Administrative expenses.

Only $1.19 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 516.00M 570.42M 698.77M 105.47M 161.41M -529.60M -83.78M -191.08M -171.66M 124.38M
divided by
Revenue 1.58B 1.30B 2.25B 1.14B 1.20B 810.10M 668.11M 517.19M 559.69M 458.93M
Net Profit Margin 32.58% 43.88% 31.11% 9.28% 13.49% -65.37% -12.54% -36.95% -30.67% 27.10%

Varying Pricing Power over the past 10 years

FRO has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$52.21 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 962.99M 694.35M 1.22B 710.59M 717.76M 810.10M 171.22M 103.40M 183.65M 241.48M
divided by
Revenue 1.58B 1.30B 2.25B 1.14B 1.20B 810.10M 668.11M 517.19M 559.69M 458.93M
Gross Margin 60.80% 53.41% 54.32% 62.53% 60.01% 100.00% 25.63% 19.99% 32.81% 52.62%

High Capital Intensity over the past 10 years

FRO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

232.47% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 569.82M 337.77M 637.90M 170.05M 548.95M 82.38M 14.50M 2.50M 44.99M 786.77M
divided by
Net Income 516.00M 570.42M 698.77M 105.47M 161.41M -529.60M -83.78M -191.08M -171.66M 124.38M
Capital Expenditure Ratio 110.43% 59.22% 91.29% 161.23% 340.10% -15.55% -17.31% -1.31% -26.21% 632.56%

Inconsistent Dividend History over the past 10 years

FRO has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid 654.48M 656.01M 641.89M 70.07M 155.72M 17.13M - - - 39.23M
divided by
Shares Outstanding 74.83M 74.87M 76.44M 77.87M 78.03M 77.86M 77.86M 79.75M 99.94M 24.02M
Dividend Paid Per Share 8.75 8.76 8.40 0.90 2.00 0.22 - - - 1.63
Price at Year End 18.15 36.63 25.14 25.51 25.15 4.29 3.19 3.69 2.59 2.96
Dividend Yield 48.19% 23.92% 33.40% 3.53% 7.93% 5.13% - - - 55.18%

History of Stock Buybacks over the past 10 years

FRO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 74.83M 74.87M 76.44M 77.87M 78.03M 77.86M 77.86M 79.75M 99.94M 24.02M
Stock Bought Back - -0.06% -2.06% -1.83% -0.21% 0.22% - -2.37% -20.20% 316.13%
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