VLCC owner DHT Holdings continues to show through its actions that it believes the stock is undervalued.
New York-listed DHT bought back $9.9m of its shares in the third quarter, topping the $8.9m it splashed out in the prior period, the company has revealed in a filing with US securities regulators.
The Svein Moxnes Harfjeld-led shipowner said it repurchased 1.14m shares at an average price of $8.72 per share, good for about 0.7% of the total shares outstanding.
On Tuesday, Jefferies lead shipping analyst Omar Nokta said in a client that the buys came at a discount to his estimate of DHT’s net asset value of $10 per share.
“DHT remains in solid financial condition with a net debt/fleet value of just 15%,” Nokta added while leaving his “hold” rating on the stock unchanged.
For the second quarter, DHT had repurchased 1.07m shares at an average price of $8.25 each.
DHT’s willingness to buy its stock may be helping to support the share price, at least according to data compiled by Jefferies.
With a price of around $9.85 on Tuesday afternoon in New York, the owner was trading at 98% of its NAV, compared to the 87% average for the Jefferies tanker peer group.
The stock is about midway between its 52-week high of $12.13 per share and its low of $6.96. The high came in February, while the low hit in October 2022.
Paying dividends
In August, DHT also paid a cash dividend of $0.35 per share, in line with its policy of paying out 100% of net income and marking the 54th consecutive quarter it had paid out a dividend.
The company’s numbers were stronger than the same period last year, and Harfjeld made the case for a more robust second-half performance in remarks included in the earnings statement.
“The current underlying freight market is between balanced and tight and easily triggered for upward movements and stronger earnings for our company,” Harfjeld said.
“The key agency implied balances in the oil market have tightened on upward revisions to general demand with the second half outlook still bullish. Chinese demand has been revised higher, despite the economic recovery so far being more measured than expected.”
