International Seaways Inc. (INSW) Hit a 52 Week High, Can the Run Continue?

Shares of International Seaways (INSW) have been strong performers lately, with the stock up 2.5% over the past month. The stock hit a new 52-week high of $55.67 in the previous session. International Seaways has gained 22.1% since the start of the year compared to the -1% move for the Zacks Transportation sector and the 7.2% return for the Zacks Transportation - Shipping industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 29, 2024, International Seaways reported EPS of $2.18 versus consensus estimate of $2.08 while it beat the consensus revenue estimate by 4.75%.

For the current fiscal year, International Seaways is expected to post earnings of $9.33 per share on $964.86 million in revenues. This represents a -17.07% change in EPS on a -9.98% change in revenues. For the next fiscal year, the company is expected to earn $8.13 per share on $909.69 million in revenues. This represents a year-over-year change of -12.83% and -5.72%, respectively.

Valuation Metrics

International Seaways may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

International Seaways has a Value Score of A. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 7.7X. On a trailing cash flow basis, the stock currently trades at 4.1X versus its peer group's average of 3.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, International Seaways currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if International Seaways passes the test. Thus, it seems as though International Seaways shares could still be poised for more gains ahead.

How Does INSW Stack Up to the Competition?

Shares of INSW have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Navios Maritime Partners LP (NMM). NMM has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of A.

Earnings were strong last quarter. Navios Maritime Partners LP beat our consensus estimate by 67.44%, and for the current fiscal year, NMM is expected to post earnings of $14.53 per share on revenue of $1.38 billion.

Shares of Navios Maritime Partners LP have gained 4% over the past month, and currently trade at a forward P/E of 3.04X and a P/CF of 2.02X.

The Transportation - Shipping industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for INSW and NMM, even beyond their own solid fundamental situation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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