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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
Hey kids, don't want to interupt the doom & gloom convention, but day rates have suddenly started to spike after being way down there. Rates have shot up so fast that the 120 or so capes that were just sitting at anchor due to low rates have gotten at least half employed. The freight futures market is starting to price in decent rates over the next few years, and there are actually starting to be bids for ships up for sale. Granted, we are a looong way away from the peak (which was unsustainable), but if this is more than a blip it is very good for dry bulker owners.
And if you subscribe to the view of Alan Greenspan that the BDI is an early indicator of future economic activity (I personally am skeptical), this bodes well for the global economy in the next 6 months or so.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
Quote:
Originally Posted by kumquat
Who do you think it will benefit the most?
Hard to tell. The ones you would think would benefit greatly may be too damaged to make it because the combination of high leverage and high spot exposure has proven pretty lethal. I pretty much know that NM and DSX will make it and do well. EGLE and GNK should. Jury is out on EXM. DRYS is gambling. I'm hapy to own some NM, and I also own some of their bonds.
Well I own NM, EGLE, DSX,FRO, and SFL so I hope things turn around. The one I'm down the worst is EGLE. But I need NM to get to around 6 to be even, should have bought more at $1.65 or less. I'm not sure were I'm at with fRO, Ive had it off and on for years and it always pays so much in dividends. The SFL I Own is primarily spin-off from FRO.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
Quote:
Originally Posted by Dawg54
How about ULTR?
They are more diversified, since they have some dry bulk, some small tankers, a river barging operation and offshore oil platform supply ships (PSVs). Most of the dry bulk exposure was hedged through 2010. The small tankers are on long term charters. The river barging stuff is usually solid, but has been affected by very low water levels on the Parana river system (not sure how much difference this will make). The PSVs they already have are mostly long term chartered. Another PSV or two will be newly delivered soon and go on long term charter. Dunno about the rest they have on order for 2010 and 2011.
So I think they are making it. The risks with this company are that they have a fair amount of bank debt and they need to fund their expansion program. The company indicated as of the Q3 report that they have raised enough money to fund the expansion program. I think they have kept the banks happy (by paying them), and since they continued to buy back stock in Q4 I take it as a sign that they are not in complete collapse. I own some of the stock and think they will be OK, but it is harder to figure out than NM. They are doing a presentation on 2/11, so we shoudl get an update sioon.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
Day rates have come back pretty hard in dry bulk land. Its hard to tell whether this is a temporary pop or the start of prolonged healthier rates. My suspicion is that things will settle out, but whether it is at higher or lower rates than today's I do not know. One of the world's largest dry bulk carriers (Mitsui OSK, Japanese) has also publicly said that they are on the prowl for acquisition candidates and they believe they have the balance sheet capacity to pull off a large deal.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
Just by the by, take a gander at the most recent deal that NM announced last night. Acquiring ships at a distressed price with virtually no cash outlay and with long term charters that will more than pay for the ships. Looks to me like they are cleaning up amid the wreckage.
Just by the by, take a gander at the most recent deal that NM announced last night. Acquiring ships at a distressed price with virtually no cash outlay and with long term charters that will more than pay for the ships. Looks to me like they are cleaning up amid the wreckage.
almost pulled the trigger on NM 3 days ago... just missed it. but continue to watch it none the less.
Just by the by, take a gander at the most recent deal that NM announced last night. Acquiring ships at a distressed price with virtually no cash outlay and with long term charters that will more than pay for the ships. Looks to me like they are cleaning up amid the wreckage.
Hope it pays off for them. I'm all for getting back in the black with my shares.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,537
I think it is likely that over the next year or so they will scoop up more ships in distressed deals, all of which would be very accretive. They have already grabbed 6 capes in such deals.
The real juice I am hoping for is from NNA warrants. This is a NM-sponsored blind trust set up to acquire shipping assets ad it is sitting on $250MM in cash to do a deal by 6/30/10. Bought a pile of warrants as a shoot-the-moon play, and I expect that they will find attractive stuff to buy.
when I look at the sea of red in my portfolio, it's almost all in tanker stocks - EGLE, OCNF, ONAV, FRO, SFL, DSSPF, GDOCF, DSX. Huge hits to all of them. These were nice income producers, and now most of them have eliminated the dividend. I will probably never get back what I paid for them, yet I hold on. Once business picks up again, and I believe it will, the divs will be reinstated and their prices will pop nicely. Or not.
when I look at the sea of red in my portfolio, it's almost all in tanker stocks - EGLE, OCNF, ONAV, FRO, SFL, DSSPF, GDOCF, DSX. Huge hits to all of them. These were nice income producers, and now most of them have eliminated the dividend. I will probably never get back what I paid for them, yet I hold on. Once business picks up again, and I believe it will, the divs will be reinstated and their prices will pop nicely. Or not.
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