TNK  Teekay Tankers Ltd

Exchange

NYSE

Sector

Consumer Services

Industry

Marine Transportation

Market Cap.

367.31M

Vuru Grade

53.06/100

Current Price

$2.35
-0.06 (-2.49%)

Growth Price

$5.00
Undervalued by 112.64%

Company Metrics

  • P/E 3.41
  • P/S 0.66
  • P/B 0.41
  • EPS 0.69
  • Cash ROIC 1.30%
  • Cash Ratio 0.33
  • Dividend 0.12 / 4.88%
  • Avg. Vol. 1.57M
  • Shares 130.72M
  • Market Cap. 367.31M

Company Description

Teekay Tankers Ltd., through its subsidiaries, engages in the ownership and operation of oil tankers. As of March 1, 2010, the company's fleet consisted of nine Aframax-class oil tankers and three Suezmax-class oil tankers. It managed four Aframax tankers in the Teekay Pool and one Suezmax tanker in the Gemini Pool; and operated seven vessels under fixed-rate time-charter contracts. The company is... more


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

News

Teekay Tankers Ltd. (NYSE:TNK) Reviewed By Analysts
The De Soto Edge - Jan 22, 2017
Stock market analysts watching Teekay Tankers Ltd. (NYSE:TNK) have recently changed their ratings on the stock. The latest reports which are outstanding on Sunday 19th of February state 1 analyst has a rating of “strong buy”, 4 analysts “buy”, 6 ...
Teekay Tankers Ltd. Reports Fourth Quarter and Annual 2016 Results
Yahoo Finance - Feb 23, 2017
Reported GAAP net income of $6.8 million, or $0.04 per share, and adjusted net income attributable to shareholders(1) of $5.1 million, or $0.03 per share, in the fourth quarter of 2016.
Teekay Tankers Declares Dividend - Marketwired (press release)
Teekay Tankers' (TNK) CEO Kevin Mackay On Q4 2016 Results - Earnings Call ... - Seeking Alpha
Teekay Tankers Ltd. (TNK) Soars 5.71% on February 14
Equities.com - Feb 14, 2017
Teekay Tankers Ltd. (TNK) had a good day on the market for Tuesday February 14 as shares jumped 5.71% to close at $2.59. About 3.65 million shares traded hands on 7,958 trades for the day, compared with an average daily volume of 1.64 million shares ...
Teekay Tankers Ltd. (TNK) Given Average Rating of “Hold” by Brokerages - BNB Daily (blog)
Teekay Tankers Ltd. (NYSE:TNK) Market Cap At $404.04M - Equities Focus
Teekay Tankers Ltd. (NYSE:TNK) News Impact Score At 0
Stock Observer - 3 hours ago
Teekay Tankers Ltd. has daily impact score of 0 by Alpha One analytics. This score shifts from 1-100 and voices the likelihood of securities movement of 1% or more.
Teekay Tankers - Dead In The Water?
Seeking Alpha - Sep 19, 2016
As of late I've been on the hunt for a significantly undervalued company to buy. Through my bottom up approach, I recently identified Teekay Tankers Ltd (NYSE: TNK) as a company of interest. In the last year shares are down from $8.39 a year ago, ...
Teekay Tankers: Unloved And Undervalued, A Buying Opportunity Before Q4 Earnings
Seeking Alpha - Feb 13, 2016
Teekay Tankers (NYSE:TNK) currently owns a fleet of 44 double-hull tankers, including 22 Suezmax tankers, 12 Aframax tankers, seven LR2 product tankers and three medium-range (MR) product tankers, and has 13 time charter-in tankers. Teekay Tankers' ...
Teekay Tankers Ltd. Reports Second Quarter 2016 Results
Yahoo Finance - Aug 4, 2016
In addition, Teekay Tankers owns a ship-to-ship transfer business and a minority interest of over 11 percent in Tanker Investments Ltd. (TIL.OL), which currently owns a fleet of 18 modern tankers. Teekay Tankers was formed in December 2007 by Teekay ...
Dividend Growth of Teekay Tankers Ltd.(TNK)
Highland Mirror - Feb 17, 2017
Teekay Tankers Ltd.(TNK) is having a Dividend Yield of 4.74% with the Annual cash Dividend per share of $0.3. The last quarter cash dividend per share pay out was $0.03.
The Huber Capital Management LLC Has $47791000 Position in Teekay Tankers Ltd ... - DailyQuint
Two Stocks on Trader's Radar: Antares Pharma Inc. (NASDAQ:ATRS), Teekay ... - The Newburgh Press
Asymmetric Risk Reward For Teekay Tankers
Seeking Alpha - Mar 4, 2016
Tanker stock prices are back to where it all started and even lower, despite record 2015 earnings. Tanker earnings outlook remains healthy, vessel supply could be a risk, but many positive demand drivers could unfold.
Teekay Tankers Ltd. (NYSE:TNK) EPS Forecast Given As $0.13
Transcript Daily - 1 hour ago
Research groups on Wall Street measuring impending earnings growth for Teekay Tankers Ltd. (NYSE:TNK) are anticipating it to reach EPS of $0.13 for the quarter ending 2017-03-31.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for TNK 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 TNK'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.

$2.35 Current Price

$5.00 Growth Price (DCF)

Undervalued by 112.64%


Growth Rate Assumed by Market: -328.98%


Future Free Cash Flow Growth Rate: -18.8%


Discount Rate: 15.0%


TNK's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$6.37 Book Price

Undervalued by 171.16%


Poor Cash Return on Invested Capital over the past 5 years

TNK has been unable to consistently generate sufficient returns from 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.

TNK has only created $1.30 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 52.79M 25.02M 4.30M 11.54M -69.44M
divided by
Invested Capital 843.99M 1.02B 1.00B 922.84M 1.78B
Cash ROIC 6.25% 2.46% 0.43% 1.25% -3.89%

Very Poor Return on Equity over the past 5 years

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

TNK has generated a $18.84 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income -9.07M -370.18M -8.14M 57.14M 179.64M
divided by
Stockholders' Equity 489.37M 302.18M 284.67M 455.72M 877.46M
Return on Equity -1.85% -122.50% -2.86% 12.54% 20.47%

Excellent Business Performance over the past 10 years

TNK has been able to maintain profitability in good times and bad. This could mean TNK has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

TNK has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 61.15M 61.05M 74.30M 70.27M 52.14M 52.79M 25.02M 4.30M 11.54M -69.44M

Weak Balance Sheet

TNK's financial position is not ideal. The key is to check whether TNK is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash - 34.84M 26.70M 10.43M 12.45M 15.86M 26.34M 25.65M 162.80M 96.42M
Current Assets 14.20M 41.02M 48.73M 23.50M 35.16M 36.75M 202.97M 215.07M 253.61M 279.81M
Total Assets 298.63M 310.32M 490.81M 539.96M 936.52M 881.93M 1.11B 1.10B 1.17B 2.17B
Current Liabilities 53.95M 8.22M 22.40M 21.64M 24.53M 22.08M 61.83M 70.19M 79.72M 289.65M
Total Liabilities 89.05M 161.53M 368.50M 333.69M 493.83M 392.56M 803.47M 812.86M 709.64M 1.29B
Stockholder' Equity 209.58M 148.79M 122.31M 206.27M 442.69M 489.37M 302.18M 284.67M 455.72M 877.46M
Current Ratio 0.26 4.99 2.18 1.09 1.43 1.66 3.28 3.06 3.18 0.97
TL-to-TA 0.30 0.52 0.75 0.62 0.53 0.45 0.73 0.74 0.61 0.60

Low or No Reinvestment of Profits over the past 10 years

TNK has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to TNK 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 - -33.03M -58.94M -40.48M -38.65M -99.07M -370.38M -388.55M -346.93M -217.41M
Retained Earnings Growth - - -78.42% 31.32% 4.53% -156.35% -273.85% -4.91% 10.71% 37.33%

Erratic Net Profit Margins over the past 10 years

TNK 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
2006200720082009201020112012201320142015
Net Income 40.15M 42.49M 51.84M 38.93M 16.31M -9.07M -370.18M -8.14M 57.14M 179.64M
divided by
Revenue 153.09M 146.31M 144.17M 113.30M 139.48M 121.00M 197.43M 170.09M 235.59M 514.19M
Net Profit Margin 26.23% 29.04% 35.96% 34.36% 11.69% -7.49% -187.50% -4.78% 24.25% 34.94%

Varying Pricing Power over the past 10 years

TNK 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.

$60.94 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 84.91M 77.10M 111.20M 76.98M 92.48M 121.00M 99.65M 63.91M 110.43M 282.32M
divided by
Revenue 153.09M 146.31M 144.17M 113.30M 139.48M 121.00M 197.43M 170.09M 235.59M 514.19M
Gross Margin 55.46% 52.70% 77.13% 67.94% 66.31% 100.00% 50.47% 37.57% 46.87% 54.90%

Medium Capital Intensity over the past 10 years

TNK has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

27.77% 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 1.02M 945,000.00 3.27M 3.83M 6.25M 2.32M 2.52M 1.90M 2.06M 236.23M
divided by
Net Income 40.15M 42.49M 51.84M 38.93M 16.31M -9.07M -370.18M -8.14M 57.14M 179.64M
Capital Expenditure Ratio 2.55% 2.22% 6.31% 9.84% 38.34% -25.54% -0.68% -23.40% 3.61% 131.50%

Strong Dividend History over the past 10 years

TNK has consistently distributed a dividend for the past 8 years. This suggests TNK is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - 69.63M 50.35M 55.24M 51.36M 32.23M 10.03M 10.17M 15.14M
divided by
Shares Outstanding - 15.38M 25.00M 28.64M 42.33M 60.77M 79.54M 83.59M 86.25M 130.72M
Dividend Paid Per Share - - 2.79 1.76 1.31 0.85 0.41 0.12 0.12 0.12
Price at Year End - 11.80 7.95 6.82 10.68 3.43 2.83 3.79 5.01 6.98
Dividend Yield - - 35.03% 25.77% 12.22% 24.64% 14.32% 3.17% 2.35% 1.66%

No History of Stock Buybacks over the past 10 years

We're neutral on this. It's not necessarily good or bad that TNK hasn't initiated a stock buyback.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding - 15.38M 25.00M 28.64M 42.33M 60.77M 79.54M 83.59M 86.25M 130.72M
Stock Bought Back - -100.00% -38.47% -12.72% -32.33% -30.34% -23.60% -4.85% -3.08% -34.02%
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