Traders Buy Large Volume of Frontline Call Options (NYSE:FRO)

Key Points

• Traders bought 294,646 call options on Frontline, a surge of 5,735% versus the average call volume of 5,050, indicating unusually large bullish options activity.
• Frontline declared a quarterly dividend of $1.03 per share (annualized $4.12), implying a 12.3% yield with an ex-dividend date of March 12, although the payout ratio is an elevated 242.35%.
• The stock dropped about 5.0% to $33.47 after reporting Q results that missed estimates — EPS $1.03 vs. $1.13 expected and revenue $424.5M vs. $456.9M — despite revenue rising 46.7% year‑over‑year.

Frontline PLC (NYSE:FRO - Get Free Report) saw some unusual options trading on Wednesday. Stock investors bought 294,646 call options on the company. This is an increase of 5,735% compared to the average volume of 5,050 call options.

Analysts Set New Price Targets

Several brokerages have recently issued reports on FRO. Evercore reiterated an "outperform" rating and set a $42.00 price target on shares of Frontline in a research report on Friday, February 27th. Jefferies Financial Group upped their price target on Frontline from $28.00 to $30.00 and gave the company a "buy" rating in a report on Friday, November 21st. BTIG Research upped their price objective on shares of Frontline from $35.00 to $42.00 and gave the company a "buy" rating in a research note on Friday, February 27th. Clarkson Capital upgraded shares of Frontline from a "neutral" rating to a "buy" rating in a research report on Monday, January 12th. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Frontline in a research note on Monday, December 29th. Four research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $31.62.

Frontline Stock Down 5.0%

Shares of Frontline stock traded down $1.77 during trading on Wednesday, hitting $33.47. 5,132,559 shares of the stock traded hands, compared to its average volume of 4,005,915. The company has a fifty day moving average price of $29.41 and a two-hundred day moving average price of $25.32. Frontline has a twelve month low of $12.40 and a twelve month high of $39.89. The stock has a market cap of $7.45 billion and a P/E ratio of 19.69. The company has a debt-to-equity ratio of 1.09, a quick ratio of 1.37 and a current ratio of 1.43.

Frontline (NYSE:FRO - Get Free Report) last announced its quarterly earnings results on Friday, February 27th. The shipping company reported $1.03 earnings per share for the quarter, missing analysts' consensus estimates of $1.13 by ($0.10). Frontline had a return on equity of 16.51% and a net margin of 19.31%.The company had revenue of $424.51 million during the quarter, compared to analyst estimates of $456.90 million. During the same period in the prior year, the firm earned $0.20 EPS. Frontline's quarterly revenue was up 46.7% on a year-over-year basis. Equities research analysts predict that Frontline will post 1.78 EPS for the current fiscal year.

Frontline Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, March 19th. Shareholders of record on Thursday, March 12th will be paid a dividend of $1.03 per share. This is a positive change from Frontline's previous quarterly dividend of $0.19. This represents a $4.12 dividend on an annualized basis and a yield of 12.3%. The ex-dividend date is Thursday, March 12th. Frontline's dividend payout ratio is 242.35%.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in FRO. University of Texas Texas AM Investment Management Co. bought a new position in shares of Frontline in the 4th quarter valued at about $25,000. Financial Gravity Companies Inc. acquired a new position in Frontline in the 2nd quarter worth $25,000. Sunbelt Securities Inc. acquired a new stake in Frontline in the 3rd quarter valued at approximately $41,000. Sound Income Strategies LLC bought a new position in Frontline in the fourth quarter valued at $53,000. Finally, CIBC Private Wealth Group LLC acquired a new stake in shares of Frontline in the third quarter valued at about $80,000. Institutional investors and hedge funds own 22.70% of the company's stock.

About Frontline

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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