Musing on Intl Seaways (INSW)

In early-to-mid Jan 2024, something caused me to be fidgety about my INSW stake, so I sold a portion of INSW in both my Roth ac and my taxable ac. So, there’s good news and bad news there.
Bad news - I don’t know what caused the angst
Good news - It couldn’t have been major, else a larger stake (or entire stake) would have been sold.

Yes, I have repurchased some INSW shares this week. This is just a review of INSW to understand why I own my stake. I had considered posting on “Value Hounds”, but my back-of-envelope NAV calculation ended up less than market cap (not by a lot, but still less). And yet, INSW is still a reasonable idea in the port. Okay, so HohumYNWA, make the case.

  1. Due to low orderbook of conventional tankers (dirty and clean), the value of existing vessels has bumped up. INSW claims the fleet as valued at $3B (I’m a little more conservative and say $2.75B). On their books, the vessels are valued at about $2B
  2. Manageable debt. INSW aggressively paid down debt in 2023 - over $280M in extra payments to reduce their debt to ~ $800M. It likely moves up again in Q1 and Q2, but vessels line item also moves up.
  3. View to the future.
    a. INSW has three dual fuel (DF) VLCCs which delivered in 2023. The new VLCCs were fixed on 7-year charters with above average rate and profit share potential.
    b, INSW ordered 2 LR1 tankers with an option for 2 more in Aug 2023. Shortly after, the company exercised the option. So four new LR1s - two in 2025, two in 2026.
    c. *INSW disposed 3 older MR2 tankers in 2023. The company announced an acquisition deal in 2024 to acquire 6 2014-2015 built MR2 tankers for $232M (Tighter tanker market, so higher than average price. But newer vessels)
  • is a Q4 2023 earnings report item, so it has no bearing on the early-mid Jan 2024 decision.
  1. INSW has a sensible dividend policy. The quarterly dividend is fixed. It started as a quarterly 3c/sh, that has now been bumped up to 12c/sh. The last six quarters, INSW has paid a special div of at least $1/sh
  2. The time-charter approach is reasonable - abt 16% of fleet on TCs (Aframax great rate, VLCC dependent on profit-share component)


  1. Shipping is misunderstood, so names start bouncing erratically (I am quite aware of this with my LNG shipping ideas FLNG and CLCO pulling back significantly).
  2. INSW has a lot of older vessels, specifically on the clean tanker side.
    a. Will those older MR2 start suffering from a loss of earnings potential?
    b. Q1 2024 looks bad for the MR2 category with over 200 days of offhire
  3. Not sure the impact of ETS standard

To conclude:

  • Higher revenue means higher margins. If INSW manage $1B in rev, margins likely in the 35-40% range
  • Expect sales of MR2 vessels in 2024. If sales price is sticky, net proceeds can cover some of the newbuild installments (I suspect many of the MR2 vessels are unencumbered)
  • If quarterly payout stays above $1, great. My own modeling lowers it to 75c (in particular, for traditionally weak Q3)