Frontline

Frontline generated over 660 million dollars in free cash flow last year, with daily ship rates hitting 74,200 dollars per vessel. Their breakeven cost is just 25,000 dollars per day, meaning they pocket nearly 50,000 dollars of pure profit on every ship, every single day in a strong market.

Global conflicts and sanctions are pushing more oil onto legitimate tankers, and Frontline has one of the youngest, most modern fleets in the world at just 7.5 years average age. New ship orders won't hit the water until 2029, so the supply shortage works in their favor for years to come.

Shipping is one of the most volatile businesses you can invest in. Frontline's earnings can swing from hundreds of millions in profit to losses depending on tanker rates. If geopolitical tensions cool down or OPEC cuts oil production, daily rates could drop fast and so would the stock price.

The stock is trading well above its actual asset value right now, at about 33 dollars per share versus a net asset value of around 12 dollars. If the current high rate environment fades, like it did for nearly a decade between 2010 and 2020, the stock could give back most of its gains.