Scorpio Tankers executives buy up stock

Investment runs to beyond $4.5m and follows dividend reduction and bullish profit projections.

Scorpio Tankers executives have raised their interest in the shipowner buying stock worth more than $4.5m in the same week as suggesting now is the time to take on risk.

New York-listed Scorpio this week cut back its dividend and boosted its liquidity with a triple sale-and-leaseback deal.

It came alongside a bullish quarterly conference call in which president Robert Bugbee suggested earnings would rip as the market improved. Three major banks upgraded the company in the days following the quarterly report.

Scorpio executives have now followed words with action, buying $2.86m worth of shares on Valentine’s Day and snapping up a further $1.68m bundle of stock yesterday.

The investments, running to 1.05 million share in total, came via Scorpio Services Holding, the investment vehicle for company executives and the Lolli-Ghetti family.

Scorpio Tankers recorded an adjusted net loss of $29.4m for the fourth quarter. Its adjusted loss of $0.18 per share was a penny better than Wall Street analysts had projected, while its dividend was cut to a penny.

President Robert Bugbee said as a shareholder he saw “far better uses” of the capital today than paying a dividend given the "real excitement" around products tankers from the end of this year.

Bugbee believes in an improving market annual results could return to 2015 levels, where profit passed $220m, or higher. He said a profit of $2 per share was possible given fleet growth in the interim.

On a conference call  Bugbee said the the company believed “now is the time to put risk on” and is willing to charter ships at an initial loss amid the belief the “curve could move up very sharply in 2018-2019”.

“Once the market starts to recover the earnings and cash flow of this company is really going to rip,” he said.

“So, you cannot hang around and wait to buy the stock. And the same way is if you’re going to put risk on in terms of time charters, you can’t hang around and wait until everything is fine, you have to start now while people are nervous.”

Bugbee and chief executive Emanuele Lauro are already among the top shareholders in Scorpio Tankers,with Bloomberg placing them seventh on the list headed by Wellington, FMR, Dimensional Fund and Putnam.

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