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Old 06-14-2007, 12:44 PM   #1
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Follow Shipping Stocks?

Not quite a one-stop shopping website...but not bad. Check it out.



http://shipping.capitallink.com/
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Old 06-14-2007, 12:51 PM   #2
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Caveat emptor. Appears to be a site paid for by the shipping companies...
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Old 06-14-2007, 03:48 PM   #3
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I wonder if Dania is planning to buy another ship:
Diana Shipping Files Shelf Registration - Forbes.com
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Old 06-14-2007, 05:53 PM   #4
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Caveat emptor. Appears to be a site paid for by the shipping companies...

Got that right. "We assist international institutions to maintain access to investors".
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Old 06-15-2007, 08:26 AM   #5
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I wonder if Dania is planning to buy another ship:
Diana Shipping Files Shelf Registration - Forbes.com
Maybe. They have a Cape on order for delivery in November , and I am not sure that they have the cash in hand to pay for it. Really, though, I think the shelf filing was done so that Palios (CEO) and Fortis (founding backer) could sell some more of their shares. When they do so, it will be another buying opportunity, which is pretty much money in the bank to me.
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Old 06-15-2007, 10:46 AM   #6
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When they do so, it will be another buying opportunity, which is pretty much money in the bank to me.
At today's price pushing $21/share, it's going to be hard to price it at $17 again.

Brewer, here's another version of the "when to sell" problem. It's pretty easy to see the value in something like DSX at $10/share. It's not so difficult to see it at $17/share. But when do you stop raising your basis through buying additional shares? Is a $19/share tertiary offering really the best use of our uninvested cash?

Another aspect of the issue is reinvested dividends. Admittedly they're a fraction of the original purchase and they don't raise the cost basis by much, but at some point it makes more sense to stop compounding and just run away with the profits. The trouble is identifying that point.
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Old 06-15-2007, 11:37 AM   #7
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At today's price pushing $21/share, it's going to be hard to price it at $17 again.

Brewer, here's another version of the "when to sell" problem. It's pretty easy to see the value in something like DSX at $10/share. It's not so difficult to see it at $17/share. But when do you stop raising your basis through buying additional shares? Is a $19/share tertiary offering really the best use of our uninvested cash?

Another aspect of the issue is reinvested dividends. Admittedly they're a fraction of the original purchase and they don't raise the cost basis by much, but at some point it makes more sense to stop compounding and just run away with the profits. The trouble is identifying that point.
I have a valuation in mind for DSX where I would start unloading (over $25, more if day rates do what I think they will do), so I do have a firm sell target on this one. The industry is volatile enough that buying and forgetting about it forever is probably not a great idea.

Just a guess, but if Palios and Fortis decide to pound ot another 8MM shares and DSX sells 2+MM to finance the November delivery, I would expect the offering to price somewhere around $19.

These guys have done so many offerings that I could have dumped my entire net worth into the company by now (and made a huge sum). Since I already own other companies in the industry, I do not wish to get overweighted. So I maintain a more-or-less permanent position of 1500 shares (500 bought at 10, 1000 bought at 15 and change). But every time DSX sells off too much (as in late Feb) or does an offering, I take advantage of it. The day the offering prices, I buy a wad of somewhat out of the money calls with the longest expiration date I can find. I then sell the calls within a month or two, usually at an obscene profit.

Example:

About the time DSX did the last offering at 19, I bought 60 contracts (aka 6000 shares worth) of September 20 calls for 80 cents a pop. Within a month or so, I sold them for $3 a pop.

I do the same thing every time EGLE does another offering.

FWIW, I think the marginal buyer of DSX is an uneducated retail rube. They have little or no clue about what they bought, how the industry works, or how things are going in the business. They trade on fear and greed. The only real concrete signs they have as to how things are going are 1) what spot rates do (which is mostly irrelevant to DSX) and 2) the amount of the dividend. I think #2 is far more important to our rubes. So just about every time DSX declares a dividend, they market reacts a lot in the short term. I project DSX bumping the dividend up to at least 60 cents a quarter ove the next 6 months, so I am pretty sure that our rubes will see the next divs (maybe 54 cents and then 60 cents) and react as they always do. If spot day rates take off again, extra gasoline will be poured on the flames.

Can't help you on the reinvested dividends. I only do them on a few selected issues.

Edit: Boy, does that sound cynical. Oh well. I take it as I find it.
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Old 06-15-2007, 12:17 PM   #8
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For those who are interested in shipping stocks - I recommend my former employer Alexander & Baldwin (ALEX) - 135 years old - their shipping arm Matson started with wooden ships & pioneered containerization and inter-modal shipping. Conservatively managed and leveraged with Hawaiian agriculture & real estate operations. A important holding for me that helped the ER along..have held for over 35 years...

Alexander Baldwin
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Old 06-15-2007, 04:07 PM   #9
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I bought DSX at $10 and sold at $15. Then I bought FRO and although it's only up 25% it throughs off a ~18% dividend and spun off another stock, SFL which is worth ~10% of the original FRO. Can anyone see anything wrong with this company?
Thanks, kbst
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Old 06-16-2007, 12:20 PM   #10
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I bought DSX at $10 and sold at $15. Then I bought FRO and although it's only up 25% it throughs off a ~18% dividend and spun off another stock, SFL which is worth ~10% of the original FRO. Can anyone see anything wrong with this company?
Thanks, kbst
I like SFL better, since I think it is lower risk. But if you don't have any ethical issues with owning oil tanker stocks, FRO or GMR would be my picks.
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Old 06-16-2007, 03:56 PM   #11
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I like SFL better, since I think it is lower risk. But if you don't have any ethical issues with owning oil tanker stocks, FRO or GMR would be my picks.
IMHO transporting oil by tanker is far and away environmentally safer than any other mode of transport. Share with me what would be a better method to transport oil?

There is no mode of transport that is entirely risk free. Elsewhere others can find my comments about maritime accidents.
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Old 06-16-2007, 04:11 PM   #12
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IMHO transporting oil by tanker is far and away environmentally safer than any other mode of transport. Share with me what would be a better method to transport oil?
There is no mode of transport that is entirely risk free. Elsewhere others can find my comments about maritime accidents.
I interpreted Brewer's comments as referring to the need to transport fossil fuel products for carbon-spewing production. If alternative energy was cheaper then we wouldn't need tankers, let alone pipelines or barrels or holding tanks!
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Old 06-16-2007, 08:21 PM   #13
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IMHO transporting oil by tanker is far and away environmentally safer than any other mode of transport. Share with me what would be a better method to transport oil?

There is no mode of transport that is entirely risk free. Elsewhere others can find my comments about maritime accidents.
Pipeline would almost certainly be safer, although its hardly foolproof. I know accidents are unlikely, but I would feel pretty bad if I were a shareholder in the company that caused the next Exxon Valdez. In contrast, a load of coal or soybeans spilling into the ocean is small potatoes.
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Old 06-16-2007, 09:09 PM   #14
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I agree that non-petrol haulers have less risk, but not none. Note the coal bulk vessel that grounded in AU in the last few days.

Odds are the Captain was directed by the company to stay in port, not to sea as was recommended locally. Now the Captain is taking the heat for following company orders. A loose-loose situation from the mariner's POV. [Spent the evening swapping tales with a former Captain and CMA continuing education program manager - 80 yoa if a day.]

Risk wise, dry bulk ships are a lot safer.
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Old 07-05-2007, 07:41 PM   #15
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BDI Pana and Supra rates up.
EGLE added to Russell 5000
EGLE thru $23.50

I just had to take some profits today.
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Old 07-05-2007, 10:42 PM   #16
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I'm up 70% in 14 months on EGLE. And I made the wrong choice taking that over DRYS!
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Old 07-05-2007, 11:17 PM   #17
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Pipeline would almost certainly be safer, although its hardly foolproof. I know accidents are unlikely, but I would feel pretty bad if I were a shareholder in the company that caused the next Exxon Valdez. In contrast, a load of coal or soybeans spilling into the ocean is small potatoes.
Pipelines fail, as can testify several families whose members died in WA state a couple years ago. A failed pipeline dumps it's contents into streams and surrounding soil. Most pipelines carry refined product. Crude has a lot of grit and will erode a pipe quicker than refined products. My order of societal risk: ship, pipe, train, overland.

A ship carries more product further, safer and cheaper than any other mode of transportation.
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Old 07-06-2007, 12:51 AM   #18
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BDI Pana and Supra rates up.
EGLE added to Russell 5000
EGLE thru $23.50
I just had to take some profits today.
Our cost basis, including reinvested dividends, is $12.86/share. We were considering selling when the price reached $20 but I'm beginning to wonder if it even makes sense to go with the classic "sell half at double and keep playing with the house money". That massive buy on 22 June was the Russell 3000 sucking it up, and now all the institutions are following suit.

In 18 months it's paid us another 18% of the shares in dividends. The August dividend will add another 1-2%. No sign that Chinese ports can handle bigger ships or offload more containers on their own...
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Old 07-06-2007, 06:06 AM   #19
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"keep playing with the house money".
The only money I consider "house money" is money I keep in the house
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Old 07-06-2007, 07:43 AM   #20
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Funny you should bring this up. After the recent run, I went back and ran the numbers on both EGLE and DSX to see what I think of valuation. I personally require a 10% yield to hold these stocks, so that is my admittedly crude yardstick.

I think by late '07/early '08 EGLE can get to a $2.50 a year run rate on the div. By the end of '08, I think they can get to $2.60 a share. This assumes rates stay more or less where they are.

By the end of this year, I think DSX can get to a $2.70 a share run rate on the dividend. I don't see much upside beyond that barring an increase in financial leverage (which they could easily do) or more accretive ship purchases (increasingly unlikely given what ships now cost). This also assumes rates stay relatively high.

So naturally these numbers could change dramatically if rates change a lot, but as things are now I think EGLE looks like a place to take profits at 25 or better. DSX has more room to grow simply because the structure of their charters gives them more upside. But as they get up to $27 or better, I would look to start selling my core position once it flips to a LT cap gain.

Unless rates collapse (not obviously imminent), I don't see much serious downside. Both these guys will issue more stock, but timing is hard to predict and the dip would probably be short-lived.
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