A couple of weeks ago, ZaksTradersCafe M&A highlighted business process management group WNS Holdings (NYSE: WNS) as a potential takeover target on July 3. On July 7, the company admitted it was in talks regarding a takeover. As part of the new M&A reporting here on ZaksTradersCafe.com, next on the possible M&A list is STNG.
It is a longstanding generalisation for the sector that STNG occupies an almost invisible sector in the stock market, and that hence its appreciation and more importantly, the value goes unappreciated. However, we know that marine transportation is one of the key parts of the global economy, and us such, at the very least there is massive strategic value in this $2bn company. Indeed, the fact that this is only a $2bn company with a fleet of 99 vessels, and is a player in the volatile crude oil transportation market may be a reason for the ongoing undervalue of the company.
To this extent, such a position makes the company more vulnerable to M&A, something which any of its larger peers could be attracted to. But could it be that there is rather more to this story than just throwing a dart at the financial pages of the Wall Street Journal, which is typical of much M&A reporting in the area.
A $60 Plus Fundamental, Technical And M&A Target
STNG shares more than halved at the time o the tariff lows in April from their summer 2024 peak through $80. They are still slow to recover given the geopolitical issues and the ongoing tariff turmoil, leaving STNG still very much in the firing line.
From a charting perspective the shares remain in a rising trend channel from January based at $40, but with an implied 3 months target as high as $63 at its upper resistance line (as shown in the chart above), something which even if hit would be well below the consensus fundamental target for STNG in the low $60 zone. It is perhaps appropriate that the consensus broker value here could and should be the price at which M&A in a competitive situation could reach. That said, declining debt, and a $124m Q1 performance, leave STNG in the value zone, for anyone interested in its strategic matters, or as a company where the current environment leaves its shares at about as low as they could be in the cycle.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
