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Anything to worry about with Frontline? Not really

During the Chicago Bulls' great run of NBA championships, Michael Jordan was once asked if he was worried about competing against an impressive Utah Jazz team in the finals one year.

"Not really," Jordan said.

Likewise with my stance toward Frontline Ltd. (NYSE: FRO). FRO has meandered somewhat since recommended on April 28, 2009 at $19.17, but just look on that as an extended buy opportunity. I'm reiterating my Buy rating for FRO.

Continue reading Anything to worry about with Frontline? Not really

The week in preview: Holiday week earnings

The earnings season is beginning to wind down as we have passed the halfway mark of the quarter and the holiday season begins in earnest next week with Thanksgiving in the United States.

Bermuda-based Frontline Ltd. (NYSE: FRO) is anticipated by analysts surveyed by Thomson Reuters to be one of the biggest earnings gainers among companies scheduled to report quarterly results this coming week. The oil tanker fleet operator is expected to post third-quarter earnings of $1.97 per share, 86.8% higher than in the same period a year ago, on revenues of $399.5 million (+44.6%). Frontline missed estimates by 6.4% in the previous quarter, and the consensus recommendation by analysts is to hold FRO. While Motley Fool likes its robust dividend, Jim Cramer said in a recent Lightning Round that he prefers rival Nordic American Tanker Shipping Ltd. (NYSE: NAT). Shares have fallen 52.9% in the past three months, and reached a 52-week low of $25.00 on Friday.

Analog Devices Inc. (NYSE: ADI) is also expected to be among the week's biggest earnings gainers. Analysts are looking for the semiconductor chip maker to report a fiscal fourth-quarter profit of $0.44 per share, 31.8% higher than a year ago, on revenues of $661.7 million (+2.0%). Analog Devices has beat estimates in three of the past five quarters, but only missed by 1.3% in the previous quarter. Analysts on average recommend buying ADI, which has a forecast long-term EPS growth rate of 17.3%, which better than the S&P 500 and that of rival Texas Instruments Inc. (NYSE: TXN). Shares sank to a multiyear low of $16.23 on Friday, and are down 41.1% in the past three months.

Continue reading The week in preview: Holiday week earnings

Global Q & A: Conserve your resources

Eoin Treacy of Fullermoney says that as commodities prices weaken, you need to look carefully before investing.

Q. Eoin, I've read that China's annual consumption of copper has declined from a 28.66% growth rate to 2.4%. What does that mean for continued growth in China and also for the global copper market?

A. China and indeed much of Asia and the Middle East are in a generational-long period where they have to build infrastructure from the ground up. The push for educating, housing, transporting and employing large young populations requires massive investment, fueling demand for commodities across the boards.

The supply side was completely taken unawares by this demand following the 20-year crushing bear market that cut exploration budgets to the bone. That is now changing, as major mining groups compete for the best resources, particularly in politically stable parts of the world.

China continues to lead the world in terms of GDP growth, although it has recently manufactured a slowdown to combat rising inflation, generally positive for the economy.

Continue reading Global Q & A: Conserve your resources

Frontline (FRO): The 'mac daddy' of oil transports

"Frontline Ltd. (NYSE: FRO) is the 'mac daddy' of the oil transport business," says growth and income expert Bryan Perry, who has added the shares to the model portfolio of his 25% Cash Machine.

"Frontline is doing a much better job of executing profits in the current market for transporting crude oil. FRO posted first quarter results that showed a jump in profits of 40%, with a dividend hiked to $2.75 for the quarter. That translates into a current annual yield of 18.25%. Even better, the company forecasts continued strength in operations and quarterly distributions.

"This kind of profit growth is a result of FRO being leveraged to the spot market for day charter rates for double-hull tankers. The company is by far-and-away the largest shipping company, with 76 vessels and a market cap of $4.4 billion.

Continue reading Frontline (FRO): The 'mac daddy' of oil transports

Transocean (RIG) for growth; Frontline (FRO) for income

For the two latest buys in his Winning Stocks newsletter, editor Harry Domash looks towards oil. His first pick, deep sea drilling Transocean (NYSE: RIG) is chosen for growth, while his second play, crude tanker operator, Frontline (NYSE: FRO) is selected for income.

The advisor explains, ""In my view, Transocean dominates an industry sector that can only grow from here. The company is a global provider of deepwater oil and gas well drilling services. Its newest equipment is able to go 10,000 feet below the ocean surface to reach oil."

Already the biggest deepwater driller, he observes, Transocean has agreed to buy competitor GlobalSantaFe. The deal, he notes, is expected to close by the end of the year.

Meanwhile, since the consumption of crude oil is growing around 2% annually, and the easily accessible oil reserves are being depleted, the advisor concludes that demand for deepwater drilling services is growing rapidly.

Meanwhile, he adds, "Transocean reported June quarter earnings of $1.84 per share vs. year ago $0.42. Revenues rose 68% to $1.43 billion. Analysts expect Transocean's revenues to climb 50% this year to $5.9 billion. They forecast earnings for the year of $7.96 per share, up 166% over '06. He rates the stock a buy for those willing to hold the shares for 12 to 24 months.

Continue reading Transocean (RIG) for growth; Frontline (FRO) for income

Analyst downgrades 7-13-07: ALL, BDK, IMCL and RSH

MOST NOTEWORTHY: RadioShack Corp (RSH), Visual Sciences (VSCN), Alcan (AL), U.S. Celluar (USM) and Westwood One (WON) were today's noteworthy downgrades:
  • Banc of America downgraded shares of RadioShack (NYSE: RSH) to Sell from Neutral and lowered their target to $18 from $26 as they believe cuts to labor costs and advertising expenses will make it more difficult to overcome declining wireless trends.
  • Friedman Billings cut Visual Sciences (NASDAQ: VSCN) to Market Perform from Outperform on valuation. Citigroup downgraded Alcan to Hold from buy on the acquisition news.
  • Westwood One (NYSE: WON) was downgraded to Sell from Hold at Citigroup based on management distractions and weak fundamentals...
OTHER DOWNGRADES:
  • Cowen removed ImClone Systems (NASDAQ: IMCL) from its Focus List, as the firm believes Erbitux is now more in line with consensus but said financials remain uninspiring.
Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Symbol Lookup
IndexesChangePrice
DJIA+20.0310,246.97
NASDAQ-2.982,151.08
S&P 500-0.071,093.01

Last updated: November 11, 2009: 03:36 AM

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