Investors Buy High Volume of Frontline Call Options (NYSE:FRO)

Key Points

• Frontline saw unusually heavy options activity on Wednesday, with traders buying 14,659 call options, about 74% above its typical volume of 8,401.
• Analyst sentiment is mixed but slightly cautious: the stock has recently received upgrades and higher price targets from some firms, but the overall consensus remains a "Hold" with an average target of $41.62.
• The stock slipped 1.1% to $37.96 even after reporting strong revenue growth, and the company also raised its quarterly dividend to $1.55 per share, implying a high annualized yield of 16.3%.

Frontline PLC (NYSE:FRO - Get Free Report) was the recipient of unusually large options trading activity on Wednesday. Traders bought 14,659 call options on the company. This is an increase of approximately 74% compared to the typical volume of 8,401 call options.

Analyst Ratings Changes

A number of analysts have recently issued reports on FRO shares. Wall Street Zen upgraded Frontline from a "buy" rating to a "strong-buy" rating in a report on Saturday, June 27th. BTIG Research increased their price objective on Frontline from $45.00 to $55.00 and gave the stock a "buy" rating in a research note on Wednesday, June 24th. Weiss Ratings upgraded Frontline from a "hold (c+)" rating to a "buy (b)" rating in a research report on Friday, May 22nd. Pareto Securities cut Frontline from a "buy" rating to a "hold" rating and set a $39.46 target price on the stock. in a research note on Monday, May 25th. Finally, Evercore downgraded Frontline from a "strong-buy" rating to a "hold" rating in a report on Tuesday, April 21st. Four equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of "Hold" and an average price target of $41.62.

Frontline Stock Down 1.1%

NYSE:FRO traded down $0.42 during trading hours on Wednesday, reaching $37.96. The company's stock had a trading volume of 1,107,519 shares, compared to its average volume of 3,533,201. The company has a market cap of $8.45 billion, a price-to-earnings ratio of 9.35 and a beta of 0.01. Frontline has a one year low of $18.04 and a one year high of $43.10. The business's 50-day moving average is $37.36 and its 200-day moving average is $33.38. The company has a debt-to-equity ratio of 0.83, a current ratio of 2.03 and a quick ratio of 2.03.

Frontline (NYSE:FRO - Get Free Report) last posted its earnings results on Friday, May 22nd. The shipping company reported $1.55 earnings per share for the quarter, missing the consensus estimate of $1.58 by ($0.03). The company had revenue of $714.24 million for the quarter, compared to the consensus estimate of $579.59 million. Frontline had a net margin of 36.70% and a return on equity of 27.80%. Frontline's quarterly revenue was up 66.9% on a year-over-year basis. During the same quarter last year, the business earned $0.18 earnings per share.

Frontline Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 23rd. Stockholders of record on Friday, June 12th were paid a $1.55 dividend. The ex-dividend date was Friday, June 12th. This is a positive change from Frontline's previous quarterly dividend of $1.03. This represents a $6.20 dividend on an annualized basis and a dividend yield of 16.3%. Frontline's dividend payout ratio is presently 152.71%.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the business. Carolina Wealth Advisors LLC boosted its position in shares of Frontline by 1,008.8% in the second quarter. Carolina Wealth Advisors LLC now owns 86,573 shares of the shipping company's stock valued at $3,012,000 after acquiring an additional 78,765 shares during the period. Rathbones Group PLC acquired a new position in Frontline during the 1st quarter valued at $412,000. Parallel Advisors LLC boosted its holdings in Frontline by 58.9% in the 1st quarter. Parallel Advisors LLC now owns 1,311 shares of the shipping company's stock valued at $46,000 after purchasing an additional 486 shares during the period. NewEdge Advisors LLC acquired a new stake in Frontline in the 1st quarter worth $912,000. Finally, Optiver Holding B.V. acquired a new stake in Frontline in the 1st quarter worth $175,000. 22.70% of the stock is currently owned by institutional investors and hedge funds.

Frontline Company Profile

Frontline Ltd. NYSE: FRO is a leading global shipping company specializing in the seaborne transportation of crude oil and petroleum products. The company's core business activities encompass the ownership and operation of very large crude carriers (VLCCs), Suezmax tankers and Aframax vessels. Through long-term charters, spot market operations and time charters, Frontline provides flexible shipping solutions that cater to a diverse set of energy producers, refiners and trading houses worldwide.

Frontline's fleet is geared toward high-capacity, ocean-going tankers capable of carrying large volumes of crude oil over intercontinental distances.

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