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  • Farstad Shipping - My Pick In The Offshore Sector Carnage [View instapost]
    Thanks for reading this post, instanton. It's good to see Farstad picking some commercial talent - they will need all the long-term contracts they can get.

    Unfortunately I don't have much to add. Q4 was a loss due to some small impairments and a large exchange rate impact on the company's debt. 2015 will be "challenging" to say the least, across the industry. But I will hold, for the reasons stated in the post above.
    Mar 15, 2015. 06:11 PM | 1 Like Like |Link to Comment
  • Navios Maritime Partners L.P Announces Acquisition of an Option to Acquire One 13,100 TEU Container Vessel With 12 Years of Employment [View article]
    Feb 26, 2015. 05:34 PM | Likes Like |Link to Comment
  • StealthGas: Forget The Dividends, Buy The Dip In This Misunderstood LPG Shipping Company [View article]
    These are good questions. Of course I'm in favour of stock buybacks, at the current price, and these are already happening, supporting the price. I guess they can add some $10m to the authorization when they announce at the end of the month.

    In fact I propose the preferred to continue funding such buybacks while maintaining compliance with any debt/equity covenants, newbuilding funding taken into account. A $50m issue at 7% is $3.5m annually (earnings and cash), which is much cheaper than even a 5c quarterly common.

    But I'm against any idea of a substantial tender at $8 per share, which is in fact what Hillson Financial - you perhaps? - proposes, which is bad capital management in light of newbuilding and debt commitments and the fact that the money was raised at $10 per share.

    I hope that makes sense. Finally, yes, I conclude by saying that those looking for income will indeed swap out, leaving the common to other types of investors.
    Feb 16, 2015. 01:57 PM | Likes Like |Link to Comment
  • StealthGas: Forget The Dividends, Buy The Dip In This Misunderstood LPG Shipping Company [View article]
    Thank you.

    I thought that Navigator got extremely good pricing in its IPO but it is a good, responsible company. Their segment of the market remains strong but the 20-22k cbm segment will also see high deliveries in the future. I will read your article.
    Feb 16, 2015. 12:14 PM | 2 Likes Like |Link to Comment
  • StealthGas: Forget The Dividends, Buy The Dip In This Misunderstood LPG Shipping Company [View article]
    They did, up until Q1 2009.
    Feb 16, 2015. 12:09 PM | Likes Like |Link to Comment
  • Euronav Could Benefit From The Return Of The Oil Contango [View article]
    Check Euronav's SEC registration statements at for extensive reporting of 9M 2014 and previous years in accordance with U.S. requirements and more. Presumably they will update them immediately after Q4 announcement in February and continue to pursue the listing.

    As the author notes, breakeven numbers include a very heavy depreciation load (as Euronav has a unique depreciation schedule 20 years with zero residual value). I must say that the U.S. public simply doesn't care about depreciation and Euronav's numbers will suffer compared to the publicists at say NAT or the Navios entities (DHT sobered up some time ago and uses 20 years to scrap value).

    To the Investment Doctor - as the comment above says, you may be double counting the effect of lower bunker prices: use of Time Charter Equivalents is a matter of convenience, lower bunker prices simply increase the TCE, as indeed they decrease the voyage costs (spot voyages are paid lump sum on the basis of Worldscale rates). On the other hand, Euronav will indeed save some $10m in opex compared to last year due to the USDEUR rate.

    But yes, I also look forward to all cylinders firing, a U.S. listing and hopefully another 40% - keep up the good work!
    Jan 14, 2015. 04:13 PM | 1 Like Like |Link to Comment
  • Farstad Shipping - My Pick In The Offshore Sector Carnage [View instapost]
    Well, it is only fair to comment on bad picks, rather than let them discreetly go into that good night.

    Oil continued falling, offshore budgets are cut, shareholders exit in an illiquid market and Farstad ended up below NOK40. Book and market values for its assets are meaningless if the assets can't find work. They are in a better position that most, if not all, Norwegian OSV owners, with relatively limited newbuilding exposure and again, relatively OK gearing ratios. Unfortunately, one doesn't make any profits from investing in the safest in a sector that sucks. Is it still my pick in the carnage? Probably yes.
    Dec 20, 2014. 05:58 AM | 1 Like Like |Link to Comment
  • The NYFEX Report: The IPO Of Navios Maritime Midstream Partners [View article]
    Will be nice to read your articles. Floating NAP at whatever price was a triumph for NNA which despite the fanfare was (and probably still is) going nowhere, crippled with huge finance costs and a bloated share count. They will trumpet the deal tomorrow.

    It just shows that the U.S. markets will even accept an MLP owning widgets, as long as you declare that the widgets will be subject to backstopped service contacts with guaranteed revenue. People like them, banks too, so why not.
    Nov 19, 2014. 05:01 PM | 1 Like Like |Link to Comment
  • The Case For Navios Maritime Partners' Stock Buybacks [View article]
    Author, you base your adapted "intrinsic value" calculation on a theory one should disregard EPS in favour of "operating surplus" (a fabricated metric only MLPs use) because EPS includes "tax" depreciation. Someone tells you that this is illogical since there is no tax depreciation but GAAP depreciation (and in fact at 25-years straight line what NMM uses is quite lower than real economic depreciation) and tries to make the point that it is even more absurd as NMM operations do not pay any taxes in the first place. Instead of reconsidering you say it's not important anymore, and want to use discounted cashflows. Just try it then using current and projected cashflows (and scrap the vessels at the end).

    Intrinsic value and MLP-type financing vehicles are incompatible concepts in my view.

    As to NMM itself, it barely covers its distribution, parent NM is currently forced to subsidize the charters when they roll off in order to keep the show running and perhaps people are catching up to those facts. But this is besides the point.
    Nov 19, 2014. 04:52 PM | Likes Like |Link to Comment
  • Frontline Ltd.: Investors Need To Prepare Now For Bankruptcy [View article]
    To clarify, some of ITCL's subsidiaries (Windsor) are in Ch11, with a $5m loss to Frontline, some others (CalPetro) are in negotiations to liquidate with zero equity to FRO as best case scenario, and the remaining ones (Golden State) are done for after the sale of the Ulriken, with another $13m loss. Total, a minimum $20-25m hit to Frontline's Q3 right out of the block, adding to the current $60m equity hole. This is before operation and possible further impairment losses, as the leased-in fleet ages badly.

    Why would anyone buy hoping that a restructuring would attribute value to current shareholders? What IS that value knowing that the only purpose of continued listing is to access the market via the ATM and further support SFL?
    Aug 31, 2014. 07:33 AM | 1 Like Like |Link to Comment
  • Euronav - An Earth-Moving Acquisition, But Is The Company Still Cheap? [View article]
    Doctor, pricing 10 million shares at EUR8.70, which is basically current book value (not even NAV) doesn't look bad.

    The only Japanese VLCCs that I can immediately associate with Euronav are the remaining Maersk bareboat-chartered H-class. The company has starting using U.S. language in documents and releases, selling itself much better (what a change from the awkwardly direct press releases of the past!) and I think that the Q2 loss will not hit the share price, especially if rates continue to stabilize. With a spike before winter hopefully everyone can cash out with a U.S listing (and pay off the usurious bond).
    Jul 9, 2014. 10:52 AM | Likes Like |Link to Comment
  • Some Thoughts on Euronav [View instapost]
    A Seeking Alpha PRO (!) article on Euronav by The Investment Doctor, fills in the blanks since January on this instablog.
    Jun 30, 2014. 01:17 PM | Likes Like |Link to Comment
  • Euronav - An Earth-Moving Acquisition, But Is The Company Still Cheap? [View article]
    I think this is a great and balanced article on Euronav and it reflects many of my own thoughts almost to the point, including the "ugly" part. A couple of small corrections:

    - the Olympia and Antarctica sale did not reflect current VLCC pricing. Their conditional sale had been fixed almost a couple of years ago as Total knows the vessels and had them already designated for the Kaombo project. Total had already made a downpayment, which would have been lost if they had backed away.
    - only $25m of 2015 convertibles remain (probably will be paid down).
    - I don't think a 5% share of the VLCC market makes any difference - Euronav is pleading with everyone to contribute their vessels in the Tankers International pool, and a 15-20% market share pool does start to make a difference.

    On the ugly part, I don't mind that much the EUR6.7 pricing - actually the share price had moved much too fast and the pricing reflects a small discount to what you think is a fair price this summer (below EUR 8). But the bond was really really bad - and perhaps you can add that all 1,750,000 million shares bought back ages ago are now backing options to management at EUR5.7 exercise price.

    There may be a buying opportunity in late July and afterwards, after Q2. But Euronav will go to the NYSE, align its depreciation policy to its competitors, present much better numbers, highlight the cashflows and U.S. investors will finally buy in.
    Jun 30, 2014. 01:12 PM | Likes Like |Link to Comment
  • Boardwalk Pipeline Partners, The MLP/Full Payout Model, And A Small Investing Experiment [View instapost]
    My BWP experiment has gone more than OK proving that MLPs can bite the bullet, scrap issuing capital only to give it back, and rebuild. At the same time, NMM is again flirting with a share price so absurdly above its earnings or equity that proves that the MLP model is very resistant.

    NMM may try to issue again just because they can, but another shipping synthetic MLP that should do a secondary before announcing Q2 seems to be CPLP. They need a new and very big "accretive" deal as not only earnings will be close to zero for the year, even the cash distribution is at risk of not being covered. I saw no reason in the recent share run-up other than to prime the share price.
    Jun 27, 2014. 05:10 PM | Likes Like |Link to Comment
  • Depreciation Policies Part III: The U.S.-listed Containership Universe And Why Maersk Is Different [View instapost]
    Just as the market was pushing Maersk's excellent Q1 results ( to almost all-time highs, the news that China blocked the P3 shipping alliance dropped the stock yesterday over 6% -

    P3 had already been approved by the US and EU authorities, and perhaps the market had priced the related cost savings in the recent run-up.

    Maersk doesn't need P3 to reach a steady, high group profitability of >$5B annually. The liner business is already highly profitable while most competitors are struggling with low freight rates in an oversupplied market. The big investments in oil and gas and the drilling business are paid by internally generated cashflows, and after a slow 2014 will return high profits. But also the spread for the Maersk bonds is ridiculously low - a new issue is coming up which will be close to free cash. The firepower for any type of investment in any downturn is enormous.

    I had to buy the dip yesterday, even if it was not at the day lows. See you after Q2.
    Jun 18, 2014. 06:48 PM | Likes Like |Link to Comment