Should you exit International Seaways (NYSE:INSW) after the latest volatility climb?


USD 42.94  0.14  0.33%   

International Seaways is currently generating 0.6343% in daily expected returns and assumes 2.7225% risk (volatility on return distribution) over the 90 days horizon. While some of us are excited about energy space, it makes sense to focus on International Seaways in greater detail to make a better estimate of its risk and reward. We will recap if the expected returns on International Seaways will justify its current volatility. International Seaways' low volatility may still impact the value of the stock as we estimate it as currently overvalued. The real value, based on our analysis, is getting close to 31.50 per share.
Published six days ago
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The company conducts business under Energy sector and is part of Oil & Gas Midstream industry.
Volatility is a rate at which the price of International Seaways or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of International Seaways may increase or decrease. In other words, similar to International's beta indicator, it measures the risk of International Seaways and helps estimate the fluctuations that may happen in a short period of time. So if prices of International Seaways fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

How important is International Seaways's Liquidity

International Seaways financial leverage refers to using borrowed capital as a funding source to finance International Seaways ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. International Seaways financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between International Seaways's total debt and its cash.

How does International utilize its cash?

To perform a cash flow analysis of International Seaways, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash International Seaways is receiving and how much cash it distributes out in a given period. The International Seaways cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Another Deeper Perspective

International Seaways reported the previous year's revenue of 469.16 M. Net Loss for the year was (45.54 M) with profit before overhead, payroll, taxes, and interest of 48.87 M.

International Seaways implied volatility may change after the climb

Latest treynor ratio indicator falls down to -10.4. Possible price increase? International Seaways currently demonstrates below-average downside deviation. It has Information Ratio of 0.2 and Jensen Alpha of 0.59. However, we advise investors to further question International Seaways expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure International Seaways' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact International Seaways' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Perspective on International Seaways

While some other firms under the oil & gas midstream industry are still a bit expensive, International Seaways may offer a potential longer-term growth to sophisticated investors. With a less-than optimistic outlook for your 90 days horizon, it may be a good time to quit some or all of your International Seaways holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to International Seaways.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of International Seaways. Please refer to our Terms of Use for any information regarding our disclosure principles.

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