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Okeanis Eco Tankers Initiation Report

Okeanis (ECO, OET.OL) is an oil tanker company which recently got a secondary listing on the NYSE. The company operates an ultra modern fleet of 14 oil tankers, comprising of 8 VLCCs and 6 Suezmaxes.

The firm is controlled by the founding family, which owns 57% of shares outstanding. This is a good thing (for now), since both insiders and other investors will benefit from the increased trading activity.

At current market cap of $875M, the stock is fairly valued on an NAV of fleet basis. However, the cash flow generation potential given the current Red Sea situation is not priced in to the stock. Nor is the upside to NAV as VLCC prices go up. A newbuild VLCC now costs upward of $124M, and the company's fleet is fitted with scrubbers, ballast water treatment system, and is an eco-design. All of which means they command a premium time charter rate and premium valuation.

The stock is currently flying under the radar. This week's sell-off in shipping is the perfect opportunity to add tanker exposure.

Good Trading!

Kashyap Sriram

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