Nordic American Tanker

A very quick look at Nordic American Tanker Shipping Ltd. (NYSE:NAT).

market cap $1.09 billion

P/E 9.95

*"The Company does not engage in any type of derivatives"

Fleet

14 suezmax(including 2 newbuildings) double hull crude carriers. Fleet age: 4 built in 1997(11 years), 4 in 1998(10 years), 1 in 2002(6 years), 2 in 2003(5 years) and 1 in 2005(3 years).
11 out of the 12 tankers operate on spot rates.
"We estimate that our average cash breakeven for our trading fleet of 12 vessels is below $9,000 per day per vessel". For comparison market leader Frontlines(NYSE:FRO) breakeven rates for Suezmaxs is $24 800.

Balance Sheet
"As of the end of 3Q08, NAT does not have any net debt". NAT has a 500 million dollar undrawn revolver.

Total assets $842 million

Long term liabilities 0

Short term liabilities $17 million

From Concordia Maritimes market bulletin, suezmax section:
"November dates have passed and gone and there's still plenty of tonnage for the end of the month. Expect rates to drop significantly next week as we see December dates start to work and Nov tonnage has to clear out."

Comments:
NAT's financial situation is far superior compared to most of it's peers, thus it is able to take advantage of current or future weaknesses of its competitors or shipyards. The company is heavily exposed to the spot market, which at the moment is not a good thing, in the near future it can be a very bad thing. I would prefer that at least 20% of the fleet would be on long term t/c. It appears that whilst I am writing this a J.Cramer has given NAT the infamous Cramer-bumb.