I wrote about an Elliott Gue pick for his “premium” Energy Strategist newsletter for the Irregulars over the weekend (it appeared in the delayed Friday File today), so I thought I might as well just make it an “all Gue, all the time” day and cover another one of his teasers today.

Especially because he says we can double our money in six months — that don’t sound half bad, eh?

This time the teaser ad is in service of his Stocks on the Run service that he runs with Yiannis Mostrous as an entry level letter to get folks in the door (it’s “free” but somehow also costs $5 per month … sort of like membership in my own Stock Gumshoe Irregulars, which is also “free” as long as you put the quotes around the word, but without quotes costs $4.50 a month … and gives you a warm fuzzy feeling besides).

But anyway, he teases us that you can “Double Your Money in 6 Months With This Classic Supply-&-Demand Play!”

It’s all about oil shipping — oil tankers, to be more precise. And he says there’s a seasonal trend in tanker rates that brings them up in October and back down sometime around February … and that …

“I’ve got the perfect tanker stock for you to buy right now for maximum profits!

“The best news is… you can get in cheap… under $12. But by February, I expect it to be trading over $20. Here’s why:

“This tanker company I’m eager to tell you about has a fleet of 14 double-hull tankers capable of carrying 12.5 million barrels of oil on a given day.”

So that’s pretty enticing — he also tells us that this company has no single-hull vessels, so they don’t have to worry about the phase-out of single hull tankers (that phase-out has been in the works for years, and every other publicly traded tanker company owns mostly, if not exclusively, double hull tankers now, but still, this is a positive if not a shocking one).

He also tells us that because of this phase-out, “a good chunk of the competition’s tanker fleet is headed for the scrap heap. Another reason supply is limited.”

Which is perhaps true, but only the second-rate and non-public companies are using single hull tankers now, and none of the oil majors have been willing to charter them and they haven’t been welcome in most ports, so the 2010 phaseout seems pretty fully “baked in” to me, though I could certainly be wrong.

Then he tells us about what else makes this stock stand out:

“You see, there are 2 ways to lease a tanker – long-term contracts or “on-the-spot” for immediate transport.

“This company has locked in two-thirds of its tankers with long-term leases. This creates a solid downside protection for the stock price.

“But what I really like about this stock is its rich dividend, currently yielding about 12%. That’s about $.32 every quarter. But signs are pointing to an increase in quarterly dividend payout to $.50.

“With the strong market for tanker stocks and the promise of bigger dividends, investors will bid up the price of the stock faster than the company will raise its dividend. It really is a win-win, if you get in now.

“That’s because you can lock in the high-dividend yield now… and possibly double your money in the next 6 months, as the stock price climbs past $20.

“But you must act NOW, before September 30th and the start of the tanker industry’s traditional fourth-quarter price rise… and before other investors get wind of this money-doubling potential in the tanker market.”

So who is it? Thinkolator sez this must be … Teekay Tankers (TNK), the tanker-owning (and separately traded) subsidiary of Teekay Corp (TK).

And to tell you the truth, I haven’t looked at this one in quite a while, but I kind of like what I see on the surface. Unlike Nordic American Tankers (NAT) and some other spot market-focused tanker fleets, TNK has a somewhat more stable focus — they put some of their ships on time charters at fixed rates, but also keep part of the fleet on spot rate charters so they can have some exposure to rising rates (and limit their exposure to falling rates). They have a “full dividend policy”, which in practice means that they pay out most of their cash flow in dividends.

It’s perhaps arguable whether their earnings and cash flow can support the same dividend for an extended period (over 10% right now), but it does seem likely, from just a look at the firm, that they should have more stable cash flow than NAT, which is more focused on spot charters, and yet they trade at a higher dividend yield … so that’s promising, and having a fair portion of the fleet on fixed charters is likely to keep the cash flow at least stable, if not growing — the company has a pretty investor-friendly website, and on it they do say that they manage the fleet with “a favorable risk/reward balance which allows Teekay Tankers to pay a dividend in virtually any spot tanker market.” The charts on their site indicate that if Suezmax and Aframax rates on the spot market average out to about $30,000/day ($35K Suezmax, $25 Aframax or thereabouts) they can pay out in the neighborhood of $2 a share, so that’s one way to get to Gue’s 50 cent quarterly dividend. Rates have averaged substantially less than that this year so far, but both the rates and the tanker stocks in general do seem to be trending up (and rates in the boom years of 2004-2006 were certainly far higher than that. The last quarterly payout was 34 cents, but the payout per quarter varies substantially.

So I don’t know if they will soon be increasing the dividend, but that’s certainly the goal — their deal with the parent company, Teekay, gives the parent a bonus payout once the dividend reaches $2.65/share annually, so I’m sure they’d like to see it get there (from what I read, the deal is that TK gets 20% of free cash flow above $3.20/share as long as the dividend is above $2.65/share). Having a majority owner that wants dividend income, in this case a parent company, always helps if you’re looking for a stable high-yield stock. And being associated with Teekay and managed in their tanker pool is also good, since they’re a large, long-standing firm with good customer connections. Growth should come as the parent company “drops down” more vessels into this subsidiary, or as they find other accretive vessel acquisition opportunities (meaning, I assume, buying tankers at prices that would allow them to increase per-share cash flow). The latest “acquisition” was of two mortgages on VLCCs (Very Large Crude Carriers) owned by some unnamed company (not Teekay) — this is accretive only because they’re using their credit line, which is very low interest, and getting an effective 10% return, and they say it will boost the annual dividend by 20 cents/share.

So that appears to be Gue’s pick this time around, though I’ve seen him write several times in recent years about many tanker companies, and it seems likely that if he’s betting on this seasonal rate uptick and increased tanker demand in general, then he probably likes a lot of the tanker companies. Still, here’s at least one for you to chew on … if you’ve got some thoughts about Teekay Tankers or any of the others, feel free to let us know with a comment below.