TOO began a decline with the drop in oil commodity prices, but for reasons based mainly price-action and not business fundamentals. Current factors affecting the price of TOO include: decline in oil demand and a strengthening dollar. Conversely, the business fundamentals of TOO are based on long term contracts generating a steady cash flow. As long as TOO's contracts remain strong, so will TOO survive.
TOO experienced a recent decline in stock, for TOO recently reported a decline in profit/EPS and an 80% slash in dividends. The decline in profit/eps is caused by a recent acquisition of two super-tankers to TOO's fleet. The recent decline in profit/eps currently does not reflect TOO's contract fundamentals nor operations. Futhermore, TOO's dividend of 11c/share represents a 13% yield/yr on current prices.
TOO currently operates a -1.9% profit margin (-20million$) in the hole due to recent acquisitions. To counter this, the recent dividend slash recovers 1.76$/share-year. At roughly 110M shares in the hands of investors - the dividend slash yields roughly 180million dollars back to the company. This 180M will restructure debt, cover the profit margin, and allow for further acquisitions.
In summary, TOO is in a strong position to bounce back from the decline in commodity oil prices. It's contract-driven business model, competitive dividends at current market price, and margin for profit-success make this company attractive.
Disclaimer: This analysis is independent of any decision made upon this information. This analysis is meant as a summary of current market information and in no way reflects on how investors should use this information.
TOO experienced a recent decline in stock, for TOO recently reported a decline in profit/EPS and an 80% slash in dividends. The decline in profit/eps is caused by a recent acquisition of two super-tankers to TOO's fleet. The recent decline in profit/eps currently does not reflect TOO's contract fundamentals nor operations. Futhermore, TOO's dividend of 11c/share represents a 13% yield/yr on current prices.
TOO currently operates a -1.9% profit margin (-20million$) in the hole due to recent acquisitions. To counter this, the recent dividend slash recovers 1.76$/share-year. At roughly 110M shares in the hands of investors - the dividend slash yields roughly 180million dollars back to the company. This 180M will restructure debt, cover the profit margin, and allow for further acquisitions.
In summary, TOO is in a strong position to bounce back from the decline in commodity oil prices. It's contract-driven business model, competitive dividends at current market price, and margin for profit-success make this company attractive.
Disclaimer: This analysis is independent of any decision made upon this information. This analysis is meant as a summary of current market information and in no way reflects on how investors should use this information.