Follow Shipping Stocks?

[BUM]

I unloaded my EXM Friday at the close. Why did I sell it, dunno. I don't remember why I bought it. Definitely hormonal. Not gonna do that anymore... and this time I mean it.

 

[73ss454]

Yeah, I dumped out of DSX and EGLE at 22. Got out just in time to keep the capital gains down. (heheh)

I'm never selling winners again also, I promise.

 

[Dawg52]

Looks like more positive news for shipping stocks.

Sector Snap: Drybulk Shippers Rise: Financial News - Yahoo! Finance

 

[Dawg52]

Uh oh. I hate to admit it, but I was watching Cramer tonight and someone called in and asked about EGLE. He admitted that he made a mistake by not recommending the stock and now says the stock has further to run.

Signal to sell?

 

[brewer12345]

Uh oh. I hate to admit it, but I was watching Cramer tonight and someone called in and asked about EGLE. He admitted that he made a mistake by not recommending the stock and now says the stock has further to run.

Signal to sell?

$25 and they can have mine. I'll even throw in my 20 contracts of december $22.50 call options for the low, low price of $3.

 

[kumquat]

Curious brewer? DSX has given me a good %age in cash and runup. Do you think there are other cash-flow plays that can beat 10%? If they keep the money coming, I really don't care about the price increasing.

 

[brewer12345]

Curious brewer? DSX has given me a good %age in cash and runup. Do you think there are other cash-flow plays that can beat 10%? If they keep the money coming, I really don't care about the price increasing.

Risk-adjusted rewards is what it is all about. Don't forget: dry bulk shipping is a highly volatile industry and share prices in the industry are extremely sensitive to changes in day rates. Annual volatility in the main index of spot rates is historically 40+%, far above that of the S&P 500. So while dry bulk has made me a lot of money, there will be a time to get off the bus.

In the meantime, the junk bond market has been selling off, so there are more plausible high yielding opportunities. The equity market has also thrown retail banks and mortgage financiers out the window.

Edit: Hmmm, day rates are now spiking higher and may well hit a new record, so it may be worth holding on a bit longer. We will see...

 

[Dawg52]

In the meantime, the junk bond market has been selling off, so there are more plausible high yielding opportunities. The equity market has also thrown retail banks and mortgage financiers out the window.

Throw us a few bones when you move in this direction.

 

[brewer12345]

Throw us a few bones when you move in this direction.

To make it real simple, KRE is a retail bank etf that would be ideal for this sort of thing. Other than that, just look at the top 10 mortgage lenders and pick ones that are more-or less pure plays.

 

[Dawg52]

To make it real simple, KRE is a retail bank etf that would be ideal for this sort of thing. Other than that, just look at the top 10 mortgage lenders and pick ones that are more-or less pure plays.

I like to keep it simple. The diversification factor makes me sleep better. Looks like KRE is at a 52 weak low and yielding close to 5%. Thanks for the idea.

 

[brewer12345]

Blew out my EGLE shares at $24.50 and let the options go, too. Too much to resist today. I'm pretty sure I can say that this has been profitable enough that I won't have buyer's remorse, even though I think I can still claim the title of "king of selling too (%&!&$# early."

Of course, the moment they knock the share price down with another secondary offering, yours truly will be panting and drooling to buy stock and/or call options.

 

[Nords]

Blew out my EGLE shares at $24.50 and let the options go, too. Too much to resist today. I'm pretty sure I can say that this has been profitable enough that I won't have buyer's remorse, even though I think I can still claim the title of "king of selling too (%&!&$# early."

Hey, for once we both timed it right. I read Fidelity's summary before I saw your post and ended up at $24.58/share.

Remember your agonizing over selling PPD? I wonder what caused this EGLE bump today... Good-news press release leaked to the street that we retail peons won't see until Friday? Index-buying effect of institutional investors mimicking the Russell 3000? Squeeze caused by the shorts covering now that EGLE's part of the index?

Who cares. We were just offered a 5% bonus to sell out.

Of course, the moment they knock the share price down with another secondary offering, yours truly will be panting and drooling to buy stock and/or call options.

I think I'll pass on that one. In fact my next question is why I'm still holding Diana Shipping, up "only" 3% today and 42% in the three months since purchase.

 

[brewer12345]

I think I'll pass on that one. In fact my next question is why I'm still holding Diana Shipping, up "only" 3% today and 42% in the three months since purchase.

The structure of DSX' charters gives them more upside leverage from rising day rates. Day rates are really going nuts and could well take off into the blue sky, dragging these stocks with them, so I am not quite ready to toss all of these things over the side. EGLE made the regrettable decision to give charterers the option to extend some of their charters at the same rate, so they have modest exposure to skyrocketing day rates. DSX, OTOH, didn't give options away and intentionally set up a chunk of their fleet to be available to re-charter now. Worked out real well, given the huge bump in day rates.

Having said that, I will be seriously thinking about dumping my DSX shares if the stock gets over 26. Can always re-load (likely with call options) when they do the next secondary.

This industry will overbuild, no question. I have enjoyed the ride upward, but I do not want to be holding the bag when supply eventually overwhelms demand.

 

[Nords]

Having said that, I will be seriously thinking about dumping my DSX shares if the stock gets over 26. Can always re-load (likely with call options) when they do the next secondary.
This industry will overbuild, no question. I have enjoyed the ride upward, but I do not want to be holding the bag when supply eventually overwhelms demand.

I agree with your logic. Having said that, I just found the answer to be personally irresistibly compelling at $25.45/share...

Glad I took a profit. There'll be the inevitable afterglow pullback for at least a couple weeks, and I don't want to be wandering around the Mainland wondering what I'm missing during market hours. I can let this party finish up without me.

Still holding Intel, SUP, and Tate & Lyle. Who's next?

 

[brewer12345]

Still holding Intel, SUP, and Tate & Lyle. Who's next?

Depending on how things go later this year, you may have a chance with SUP. The UAW negotiations are going down shortly plus the Mexican plant should be up to speed by the end of the year. Better contracts from the OEMs plus sorted-out operations could well push the stock up and give you an attractive exit point by the end of 2007/early 2008.

 

[BUM]

On selling EGLE ...Way to go guys! What a run! I was all set to post a snippy retort reminding you Brewer that you were going to sell when s o m e d a y EGLE should hit $25. Well here it is and you pulled the trigger. I was busy all day and just now saw the day's activity.

I'll sell off what I have left this week, if not tomorrow

What do we do for an encore? Just relax and be happy?...nah.

 

[brewer12345]

On selling EGLE ...Way to go guys! What a run! I was all set to post a snippy retort reminding you Brewer that you were going to sell when s o m e d a y EGLE should hit $25. Well here it is and you pulled the trigger. I was busy all day and just now saw the day's activity.

I'll sell off what I have left this week, if not tomorrow

What do we do for an encore? Just relax and be happy?...nah.

Think about KRE. Retail banks are the cheapest they have been in years (maybe a decade?). KRE is a retail bank ETF. That way you would avoid single name risk and still take advantage of the sector. You could pick out individual names as well, but the whole sector is so cheap that I think the ETF is not a bad way to go.

Also looking at junk bonds, but in no rush. Currently junk derivatives have blown out wider than the cash bonds, so either the derivatives are over-reacting, or the bonds will be selling off soon. Not so sure which is which, and since their will be LBOs that blow up in spectacular fashion some time in the next few years, there will be plenty of opportunities to buy junk on the cheap, I suspect.

Love the signature. I saw this on a yahoo board and thought it was funny:

"
Was out on the Bay the other day when a bulker went by under the Sunshine Skyway bridge heade to port. It took about an hour from the time I first saw it on the horizon to the time it went out of sight. In that hour, assuming it was a Panamax on spot, it made 2500.00 as it sailed by....I commented to the guys I was with, explaining the rates bulkers command now and are likely to see later this year and well, they scoffed. Now they don't, they are invested. Even at this point, new money is probably a good idea. "

 

[Dawg52]

Think about KRE. Retail banks are the cheapest they have been in years (maybe a decade?). KRE is a retail bank ETF. That way you would avoid single name risk and still take advantage of the sector. You could pick out individual names as well, but the whole sector is so cheap that I think the ETF is not a bad way to go.

Also looking at junk bonds, but in no rush. Currently junk derivatives have blown out wider than the cash bonds, so either the derivatives are over-reacting, or the bonds will be selling off soon. Not so sure which is which, and since their will be LBOs that blow up in spectacular fashion some time in the next few years, there will be plenty of opportunities to buy junk on the cheap, I suspect.

AFN needs pumping up, not that I have any interest in it.

 

[Nords]

Think about KRE. Retail banks are the cheapest they have been in years (maybe a decade?). KRE is a retail bank ETF. That way you would avoid single name risk and still take advantage of the sector. You could pick out individual names as well, but the whole sector is so cheap that I think the ETF is not a bad way to go.

Well, I'm impressed. That is one sucky bunch of beaten-down banks, an ETF not even its mother could love. And paying almost a 5% dividend on a 0.35% expense ratio, too! How many utilities or other sector ETFs can make that claim?

On one hand we have a large-cap blue-chip dividend fund like DVY, which I wouldn't mind boosting in our asset allocation if it goes on sale a bit more, but which also has a slightly lower dividend rate and a slightly higher expense ratio for its stability. On the other hand we have KRE with its "margin of safety" and its volatility.

Choices, choices. I suspect we won't have to make a decision before October...

 

[brewer12345]

AFN needs pumping up, not that I have any interest in it.

I own a bit and am sorely tempted, but I am already heavily levered to the whole mortgage market. I may well buy some long-dated calls struck at $7.50. If AFN does anything other than circle the bowl in the next 6 months, I would expect a recovery. If it goes kerblooey, well, the option premia is pretty small.

 

[terminator]

And paying almost a 5% dividend on a 0.35% expense ratio, too!

The fund's page says a 3.2% yield, Yahoo says 3.13%. The last distribution was 5% annually, but the first several distributions were smaller. Maybe it was ramping up after formation or there were special dividends last time? Anyway, the index itself (KBW Regional Banking Index) supposedly has a yield of 3.02%:
ETF SSgA Funds: KBW Regional Banking, KRE - Index Detail

Anyway, I like the looks of this ETF. I've reviewed a lot of smaller banks in the last six months, so about half of these companies are familiar to me and most seem like pretty good buys.

 

[Nords]

Anyway, I like the looks of this ETF. I've reviewed a lot of smaller banks in the last six months, so about half of these companies are familiar to me and most seem like pretty good buys.

Brewer's done a very good job of finding my weak spot-- a basket of undervalued stocks...

Of course our ER portfolio is already heavily tilted toward financials, but they don't seem to be overvalued. And after having waded through the spreadsheets of potential disasters like First Fed I was wondering how to evaluate a retail bank. A whole ETF of them doesn't seem much easier!

 

[brewer12345]

Just blasted out 2/3 of my DSX at 25.95. Hanging onto the last 500 shares until 8/16, since that is where they go LT.

 

[Nords]

Just blasted out 2/3 of my DSX at 25.95. Hanging onto the last 500 shares until 8/16, since that is where they go LT.

All of my DSX profits were short-term, and how, but they were generated by liquidating a Nortel position.

I'm still smiling.

 

[brewer12345]

All of my DSX profits were short-term, and how, but they were generated by liquidating a Nortel position.

I'm still smiling.

I would have liked to hold, but this has moved awfully far, awfully fast. I also have heard rumors that someone has agreed to pay $550MM for three capesizes. If true, it is an absurd price and it better not be DSX paying it. Unless they levered the crap out of the company, they would have to issue upwards of 20MM shares to finance it.