Torm (NASDAQ:TRMD) Shares Gap Down - Should You Sell?

Key Points

• Torm shares gapped down from a prior close of $35.34 to open at $32.59, later trading near $34.61. The company has a $3.48 billion market cap and trades at a low P/E ratio of 5.61.
• Analysts maintain a generally positive outlook, with an average rating of “Buy” and an average price target of $38.00, despite one downgrade from “strong buy” to “buy.”
• Torm reported quarterly EPS of $3.25, slightly below estimates, but revenue of $662.8 million exceeded expectations. It also raised its quarterly dividend to $2.40, implying a 28.2% annualized yield, though its payout ratio is above 100%.

Shares of Torm Plc (NASDAQ:TRMD - Get Free Report) gapped down before the market opened on Tuesday . The stock had previously closed at $35.34, but opened at $32.59. Torm shares last traded at $34.6110, with a volume of 3,586,330 shares.

Analysts Set New Price Targets

TRMD has been the subject of a number of research reports. Evercore restated an "outperform" rating and issued a $38.00 target price on shares of Torm in a research note on Wednesday, August 26th. Wall Street Zen downgraded shares of Torm from a "strong-buy" rating to a "buy" rating in a research report on Sunday, September 6th. Finally, Weiss Ratings raised shares of Torm from a "hold (c+)" rating to a "buy (b-)" rating in a report on Friday. One investment analyst has rated the stock with a Strong Buy rating, two have given a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Buy" and an average target price of $38.00.

Torm Stock Performance

The firm has a fifty day moving average of $30.90 and a 200-day moving average of $29.91. The firm has a market cap of $3.48 billion, a P/E ratio of 5.61 and a beta of 0.12. The company has a quick ratio of 1.97, a current ratio of 2.27 and a debt-to-equity ratio of 0.33.

Torm (NASDAQ:TRMD - Get Free Report) last released its earnings results on Wednesday, August 26th. The company reported $3.25 EPS for the quarter, missing analysts' consensus estimates of $3.31 by ($0.06). Torm had a return on equity of 27.24% and a net margin of 35.51%.The business had revenue of $662.80 million for the quarter, compared to analyst estimates of $499.01 million.

Torm Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, September 24th. Investors of record on Thursday, September 10th will be given a $2.40 dividend. The ex-dividend date is Thursday, September 10th. This represents a $9.60 annualized dividend and a dividend yield of 28.2%. This is a boost from Torm's previous quarterly dividend of $0.70. Torm's payout ratio is presently 115.32%.

Hedge Funds Weigh In On Torm

Large investors have recently added to or reduced their stakes in the company. Squarepoint Ops LLC lifted its position in Torm by 180.7% during the 2nd quarter. Squarepoint Ops LLC now owns 22,214 shares of the company's stock worth $579,000 after buying an additional 14,300 shares in the last quarter. Allianz Asset Management GmbH bought a new position in shares of Torm in the 2nd quarter valued at about $267,000. denkapparat Operations GmbH increased its position in shares of Torm by 63.8% in the second quarter. denkapparat Operations GmbH now owns 23,276 shares of the company's stock valued at $607,000 after acquiring an additional 9,064 shares during the last quarter. TD Waterhouse Canada Inc. raised its holdings in Torm by 37.3% during the second quarter. TD Waterhouse Canada Inc. now owns 28,852 shares of the company's stock worth $757,000 after acquiring an additional 7,836 shares in the last quarter. Finally, Headlands Technologies LLC raised its holdings in Torm by 75.3% during the second quarter. Headlands Technologies LLC now owns 15,130 shares of the company's stock worth $394,000 after acquiring an additional 6,501 shares in the last quarter. Institutional investors own 73.89% of the company's stock.

About Torm

TORM plc is an international product tanker company that transports refined oil products and other energy-related cargoes by sea. Its vessels carry products such as gasoline, jet fuel, diesel and other clean petroleum products between production, storage and consumption markets.

The company operates a fleet of product tankers across several size categories, including long-range, medium-range and Handysize vessels. TORM provides seaborne transportation services to oil companies, trading houses and other commercial customers, with operations serving major shipping routes and energy markets worldwide.

TORM traces its history to 1889 and is headquartered in Copenhagen, Denmark.

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