FRO  Frontline Ltd.

Exchange

NYSE

Sector

Transportation

Industry

Marine Transportation

Market Cap.

1.04B

Vuru Grade

21.65/100

Current Price

$6.12
-0.06 (-0.97%)

Company Metrics

  • P/E 31.88
  • P/S 1.59
  • P/B 0.72
  • EPS 0.19
  • Cash ROIC -7.14%
  • Cash Ratio 1.18
  • Dividend 0.6 / 9.58%
  • Avg. Vol. 595,603.00
  • Shares 169.93M
  • Market Cap. 1.04B

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

Better Buy: Textainer Group Holdings Limited vs. Frontline Ltd.
Motley Fool - Oct 9, 2017
While both Textainer Group Holdings Limited (NYSE:TGH) and Frontline (NYSE:FRO) operate in the shipping industry, these companies couldn't be more different.
Stock Survey: Checking Signals for Frontline Ltd (FRO)
Stock Talker - Oct 19, 2017
Investors may be looking at some various trading signals on shares of Frontline Ltd (FRO). After a recent look, we noticed that the current 20-day moving average vs price signal is Buy.
Frontline Ltd. (NYSE:FRO) Analysts Digging into the Details
The Business Union - 22 hours ago
Frontline Ltd. (NYSE:FRO) closed the last session at $6.3 and sees an average of 450860 shares trade hands in each session.
Analyst Opinion On How To Bet On Frontline Ltd. (FRO), ANI Pharmaceuticals ...
Post Analyst - Oct 17, 2017
Over the last five days, shares have managed 8.25% gains and now is up 0.85% since hitting its 200-day moving average of $5.91. Frontline Ltd. (FRO) has made its way to a 12-month decline of -15.78%. Turning to ANI Pharmaceuticals, Inc. (NASDAQ:ANIP), ...
How Analysts Feel About Frontline Ltd. (NYSE:FRO)? - BZ Weekly
Frontline Ltd. (NYSE:FRO): What are The Ratio's Saying About This Name
Financial Newsweek - 15 hours ago
The Current Ratio of Frontline Ltd. (NYSE:FRO) is 1.66. The Current Ratio is used by investors to determine whether a company can pay short term and long term debts.
Is Frontline Ltd. (NYSE:FRO) Headed For Earnings Growth? - Collins Courier
Services stock is Neither Hold nor sell: Frontline Ltd. (FRO)
Street Observer (press release) - 22 hours ago
Frontline Ltd. (FRO) stock price moved with dropping change along with the volume 0.34 million shares in Thursday trading session.
Risk Malaise Alert in Option Market: Frontline Ltd. Implied Price Swing Hits A ...
CML News - Sep 24, 2017
Before we dive into any analysis we simply note that Frontline Ltd. (NYSE:FRO) risk is actually priced pretty low by the option market as of right now.
Stock Volatility Risk Alert: Frontline Ltd. Realized Volatility Hits An ...
CML News - Oct 11, 2017
Before we cover the full analysis we make a quick alert here that Frontline Ltd. (NYSE:FRO) has seen its stock price whip around at an escalated level.
Frontline Ltd (FRO) Needle Moving -0.81%
Stock Rover - Oct 20, 2017
Frontline Ltd (FRO) shares are moving today on volatility -0.81% or $-0.05 from the open. The NYSE listed company saw a recent bid of 6.13 and 93239 shares have traded hands in the session.
A Look Under the Hood at Frontline Ltd. (NYSE:FRO)'s Profitability
JCTY News - 15 hours ago
The Return on Invested Capital (aka ROIC) Score for Frontline Ltd. (NYSE:FRO) is 1.298043. The Return on Invested Capital is a ratio that determines whether a company is profitable or not.
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.

$6.12 Current Price

$-3.92 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$6.06 Book Price

Fairly valued


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 $7.14 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 54.07M -45.19M 10.42M -579.43M -336.45M
divided by
Invested Capital 1.36B 1.18B 563.86M 2.36B 2.57B
Cash ROIC 3.97% -3.84% 1.85% -24.58% -13.10%

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 $10.71 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -83.78M -191.08M -171.66M 124.38M 117.51M
divided by
Stockholders' Equity 119.68M -26.95M -70.98M 1.45B 1.50B
Return on Equity -70.00% - - 8.60% 7.84%

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
2007200820092010201120122013201420152016
Free Cash Flow 208.04M 169.36M 151.47M -231.30M -25.53M 54.07M -45.19M 10.42M -579.43M -336.45M

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
2007200820092010201120122013201420152016
Cash 184.12M 250.96M 145.50M 228.12M 163.08M 140.99M 59.79M 69.73M 287.71M 216.22M
Current Assets 1.06B 821.36M 783.18M 587.76M 410.41M 392.03M 260.15M 233.24M 467.47M 383.63M
Total Assets 3.76B 4.03B 3.72B 3.80B 1.84B 1.69B 1.37B 962.18M 2.89B 2.97B
Current Liabilities 590.23M 710.93M 605.36M 503.58M 167.38M 186.62M 130.77M 328.59M 242.04M 182.75M
Total Liabilities 3.32B 3.33B 2.97B 3.05B 1.64B 1.57B 1.39B 1.03B 1.44B 1.47B
Stockholder' Equity 445.97M 702.22M 741.34M 747.13M 200.98M 119.68M -26.95M -70.98M 1.45B 1.50B
Current Ratio 1.80 1.16 1.29 1.17 2.45 2.10 1.99 0.71 1.93 2.10
TL-to-TA 0.88 0.83 0.80 0.80 0.89 0.93 1.02 1.07 0.50 0.49

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
2007200820092010201120122013201420152016
Retained Earnings - 45.40M 78.03M 83.72M -463.01M -545.77M -734.28M -897.21M 81.21M 34.07M
Retained Earnings Growth - - 71.86% 7.29% -653.06% -17.87% -34.54% -22.19% 109.05% -58.05%

Erratic Net Profit Margins over the past 10 years

FRO has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 570.42M 698.77M 105.47M 161.41M -529.60M -83.78M -191.08M -171.66M 124.38M 117.51M
divided by
Revenue 1.30B 2.25B 1.14B 1.20B 810.10M 668.11M 517.19M 559.69M 458.93M 772.93M
Net Profit Margin 43.88% 31.11% 9.28% 13.49% -65.37% -12.54% -36.95% -30.67% 27.10% 15.20%

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.

$51.62 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
2007200820092010201120122013201420152016
Gross Profit 694.35M 1.22B 710.59M 717.76M 810.10M 171.22M 103.40M 183.65M 241.48M 423.93M
divided by
Revenue 1.30B 2.25B 1.14B 1.20B 810.10M 668.11M 517.19M 559.69M 458.93M 772.93M
Gross Margin 53.41% 54.32% 62.53% 60.01% 100.00% 25.63% 19.99% 32.81% 52.62% 54.85%

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.

302.35% 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
2007200820092010201120122013201420152016
Capital Expenditure 337.77M 637.90M 170.05M 548.95M 82.38M 14.50M 2.50M 44.99M 786.77M 622.46M
divided by
Net Income 570.42M 698.77M 105.47M 161.41M -529.60M -83.78M -191.08M -171.66M 124.38M 117.51M
Capital Expenditure Ratio 59.22% 91.29% 161.23% 340.10% -15.55% -17.31% -1.31% -26.21% 632.56% 529.69%

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
2007200820092010201120122013201420152016
Dividend Paid 656.01M 641.89M 70.07M 155.72M 17.13M - - - 39.23M 164.55M
divided by
Shares Outstanding 74.87M 76.44M 77.87M 78.03M 77.86M 77.86M 79.75M 99.94M 24.02M 156.97M
Dividend Paid Per Share 8.76 8.40 0.90 2.00 0.22 - - - 1.63 1.05
Price at Year End 36.63 25.14 25.51 25.15 4.29 3.19 3.69 2.59 2.96 7.11
Dividend Yield 23.92% 33.40% 3.53% 7.93% 5.13% - - - 55.18% 14.74%

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
2007200820092010201120122013201420152016
Shares Outstanding 74.87M 76.44M 77.87M 78.03M 77.86M 77.86M 79.75M 99.94M 24.02M 156.97M
Stock Bought Back - -2.06% -1.83% -0.21% 0.22% - -2.37% -20.20% 316.13% -84.70%
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