Is Newlead Gaining On Its Competitors? [View article]
It is very easy and it takes you 20 minutes. Let's take the – already out of date – NEWL fleet list at http://bit.ly/IbWENz and compare it with its debts as disclosed in various SEC filings.
Hiona and Hiotissa, two handymax product tankers, trading spot in a pool. Outstanding loan balance of $58.6m as of 29 June 2011, current value is $32m. Covenants kicking in right now. Bank taking a bath.
Gujarat, Endurance and Tomi, foreclosed by the banks. Not there.
Serenity, sold to Navios at a good price, to repay the related loan ($24m).
Brazil, Australia, China and Grand Rodosi returned to owners, breaching the related charter agreements. Shares flooding the market probably come from here, NEWL paying compensation in shares.
The Newlead Victoria had a loan balance of $26m as of 29 June 2011, with disclosed covenant breaches and temporary waiver until 31 March 2012. Spot-related charter. Current vessel value around $18m. Forget about it.
Grand Ocean had a loan balance of $17.75m as of 29 June 2011 with various waivers until end-2012. Spot. Vessel value, I don't know, around $8m. Bye bye.
Grand Venetico, spot, value around $7m and Grand Markela, value around $7m+some $6m value of charter until next year. Financed through a revolving credit facility, amount drawn (including for working capital purposes), about $49m. Sayonara.
Remaining handymax newbuilding has a $24m loan against it. To be sold.
That's it basically. Effectively Zero fleet. There are some claims against TMT. Together with cash, this will help pay the banks. These guys were so brash even had $81m of goodwill in their accounts. They were bust already a year ago. They have resorted to handing chunks of shares to the owners so they can sell and perhaps personally guarantee the loans.
So the stock is worth zero. Or not. It may be worth something to another dodgy shipowner in order to reverse merger into the idiotic US market, as Newlead did in the carcass of old Aries. But the business is worth zero.
Euroseas: Arbitrage Opportunity And Strong Cash Flows [View article]
I don't do irony very well but anyway bless you. What I'm saying is that half of your article and some comments are conjectures based on the flawed idea that the ESEA shelf registration, including the registration of the family shares, is new. It's not. I don't have any comments on your valuation.
Neither Starbulk nor Paragon are great investments - they are penny stocks with all the related risk and reward. Management and controlling shareholders legally steal from the rest of you - not as egregiously as in other companies, but they do. As to SBLK's repurchase plan, the SEC filings show the correct amount (3M). Ask yourself, in addition, why SBLK issued a misleading press release announcing the plan at the end of January, with ensuing share price pop above $1, when the board had authorized the plan on November 9, 2011.
Is Newlead Gaining On Its Competitors? [View article]
This company hasn't filed financials since 2011 Q2 and was insolvent already at that time. Instead of filing accounts, they issue misleading press releases. Most of their ships have been repossessed by the banks. They also award additional huge equity stakes to management as salaries, probably to be sold in an engineered share price spike like this one. And then people complain about Chinese reverse mergers...
Euroseas: Arbitrage Opportunity And Strong Cash Flows [View article]
The blind leading the blind. The renewal of a 2008 shelf registration statement which was about to expire last year creates all sorts of conspiracy theories. Pittas has been a declared buyer for the last couple of years and now you go through convoluted hypotheses to explain the share drop? Why don't you ask first if there was any justification for the rally of the shipping stocks over the first quarter (there was not).
Anyway, if obvious shipping scams can double and triple with no apparent cause there is no reason for ESEA, which seems better managed, not to have its day in the sun (and give you a breast-beating opportunity) even if most of its fleet should be valued at scrap levels. What seems obvious is that the investors in Euromar will eventually need an exit and that goes through the capital markets/ESEA.
Hartford Financial: TARP Warrants Offer Advantages [View article]
About time they did that. A $900m hit to equity (with another $1.5b equity impact from new DAC accounting plus other restructuring measures, interesting to see Q1 results), but progress towards sorting out the capital structure and finally dismantling this company which has been very badly managed.
"The medicine didn't work," writes Antonis Samaras - possibly Greece's next PM - of 2 years of severe austerity which has brought the country's debt/GDP ratio from 120% to 168%. In what sounds like the beginnings of a push to redo the rescue program, Samaras says austerity cannot work without "measures to assist recovery and promote sustainable growth." [View news story]
Please. Greeks cut the salaries and pensions of the lower middle class - true, a state-fed land bloated ower middle class. That's it. Nothing else has happened over the last two years, no "measures to assist recovery and promote sustainable growth" have been taken (privatizations, liberalization of professions, elimination of the local corrupt political and business elite), let alone ensuring that state revenues are collected. Troika people come back rolling their eyes and washing their hands. Slowly the markets are fully realizing that the country had always been in essence a terminal case.
AIG Shares Fail To Reflect Improving Fundamentals [View article]
A lot of articles on AIG recently. Anyway, what I wanted to add is that your performance comparison chart is missing ACE, which outperformed all other companies you include over the relevant period. A $25 billion insurer going from high to high, ACE strangely falls under the radar here in SA.
Navios Acquisition: Unwinding The Spin [View article]
Torm is in a workout situation, it's not a going concern. Buying the stock now is essentially gambling, an option on an unknowable outcome.
My opinion is that the combination of secured lenders with just enough good collateral, too many unsecured interested third parties (charterers) that threaten banks' position and a stingy and selfish main shareholder (G. Panagiotedes) means that Torm's current equity is worthless, even after a restructuring.
Navios Acquisition: Unwinding The Spin [View article]
The NNA 20-F for 2011 is out and I just wanted to complete one of the open points in the article above: the total cost of Nave Andromeda was $44.6 million compared to announced purchase price of $40 million - probably similar total cost for the Nave Estella, delivered in 2012 and not mentioned in the 20-F, compared to announced purchase price of $40 million.
Knightsbridge: Is the Tanker Company Targeting an Acquisition? [View article]
Instead of raising money while they can, Knightsbridge allows GOGL to further monetize the sale of two capes, the charter of one of them already having blown up. In the meantime, charterers (Shagang?) are not paying anyway and receivables build up, Sanko will stop paying, and two more VLCCs worth basically scrap are going spot in the next quarter (and they bent over for Frontline on the charter of the Hampstead for a measly $1m). Why is VLCCF trading where it is? Investors' infatuation with dividends is indeed very powerful.
Thanks - nice article and civilized discussion. I think all would agree that Fortescue was indeed the speculative buy of a lifetime six or seven years ago.
I'm interested in Fortescue indirectly, through Compagnie Maritime Belge, which is still sitting on 38m FMG shares, some of them issued to CMB @ AUD2 at end-2008, some of them @AUD4.3 at end-2009 and the AUD has rocketed since then. Hope FMG does well.
Overseas Shipholding Group: Why Now Is a Great Time to Buy [View article]
So consistent with the comment above, I took half a position at $9.35. In the absence of any other obvious immediate negative catalyst (other than general market downturn) and in view of the possibility of positive ones+short squeezes, I think the risk is very acceptable. I don't think dilution is in the immediate horizon - it makes no sense; they will try first to monetize (again!) the US flag cash flows and the LNG/FSO joint ventures. Terrible managers these guys, however. Not my favorite tanker stock but perhaps an opportunity for another short- to medium-term trade http://seekingalpha.co...
Navios Acquisition: Unwinding The Spin [View article]
Hi Arun - about TRMD, my comment was that it has collapsed - its current share price reflects basically option value. Of course it has a chance of surviving but this is up to the banks - who were asking for a $300 million equity infusion already some months back. The expensive charter-ins have resulted in negative operating cash-flows for the last four quarters, and despite the slightly improving MR rates, LR and drybulk rates remain stuck or deteriorate: Q4 2011 and Q1 2012 will again drain cash, without even factoring debt repayment. Obviously the banks are tempted to pull the plug, since they are secured and don't want the charters to further drain the company. TRMD reports 2011 results, restructuring or worse in a couple of days.
I don't know what the ADRs represent, but each of the 203m Copenhagen shares have been trading at DKK50-60 so around $8-10. The current market cap is EUR1.6b. I sense from one of your points ("expected operating profit" in the first bull argument) that the current market cap is not fully acknowledged - correct me if I'm wrong. This would mean that you need to adapt your arguments to a price triple of that of the ADR - perhaps you would even change your mind a bit.
In 2007 Vestas was trading at 120x earnings and even in 2010 it was at 30x. It is natural to take a look when the price comes back down to earth. Personally I did take quick look back in November but let it go.
Safe Bulkers Still Has Attractive Risk/Reward [View article]
Hah, I thought you had given up on SB. Anyway, I'll make the same point I made on your first related article: SB investors can feel relatively assured - one can never know - that their money is not diverted to management's/bankers'/... third party pockets in any of the various ingenious ways many shipping companies have adopted (and always disclose). SB keeps operating, financing and G&A costs extremely low. They care about the franchise and the owner/CEO is one of the most upfront commentators on shipping markets I've ever heard. He is less cagey and more open now that a couple of years back.
I'm not a fan of the dividend and I'm worried that there may be another badly executed spring secondary offering so personally I recently reduced my position. But in contrast to many other companies in the sector, SB seems really safe to me for the very long term.
Is Newlead Gaining On Its Competitors? [View article]
Hiona and Hiotissa, two handymax product tankers, trading spot in a pool. Outstanding loan balance of $58.6m as of 29 June 2011, current value is $32m. Covenants kicking in right now. Bank taking a bath.
Gujarat, Endurance and Tomi, foreclosed by the banks. Not there.
Serenity, sold to Navios at a good price, to repay the related loan ($24m).
Brazil, Australia, China and Grand Rodosi returned to owners, breaching the related charter agreements. Shares flooding the market probably come from here, NEWL paying compensation in shares.
The Newlead Victoria had a loan balance of $26m as of 29 June 2011, with disclosed covenant breaches and temporary waiver until 31 March 2012. Spot-related charter. Current vessel value around $18m. Forget about it.
Grand Ocean had a loan balance of $17.75m as of 29 June 2011 with various waivers until end-2012. Spot. Vessel value, I don't know, around $8m. Bye bye.
Grand Venetico, spot, value around $7m and Grand Markela, value around $7m+some $6m value of charter until next year. Financed through a revolving credit facility, amount drawn (including for working capital purposes), about $49m. Sayonara.
Remaining handymax newbuilding has a $24m loan against it. To be sold.
That's it basically. Effectively Zero fleet. There are some claims against TMT. Together with cash, this will help pay the banks. These guys were so brash even had $81m of goodwill in their accounts. They were bust already a year ago. They have resorted to handing chunks of shares to the owners so they can sell and perhaps personally guarantee the loans.
So the stock is worth zero. Or not. It may be worth something to another dodgy shipowner in order to reverse merger into the idiotic US market, as Newlead did in the carcass of old Aries. But the business is worth zero.
Euroseas: Arbitrage Opportunity And Strong Cash Flows [View article]
Neither Starbulk nor Paragon are great investments - they are penny stocks with all the related risk and reward. Management and controlling shareholders legally steal from the rest of you - not as egregiously as in other companies, but they do. As to SBLK's repurchase plan, the SEC filings show the correct amount (3M). Ask yourself, in addition, why SBLK issued a misleading press release announcing the plan at the end of January, with ensuing share price pop above $1, when the board had authorized the plan on November 9, 2011.
Is Newlead Gaining On Its Competitors? [View article]
Euroseas: Arbitrage Opportunity And Strong Cash Flows [View article]
Anyway, if obvious shipping scams can double and triple with no apparent cause there is no reason for ESEA, which seems better managed, not to have its day in the sun (and give you a breast-beating opportunity) even if most of its fleet should be valued at scrap levels. What seems obvious is that the investors in Euromar will eventually need an exit and that goes through the capital markets/ESEA.
Hartford Financial: TARP Warrants Offer Advantages [View article]
"The medicine didn't work," writes Antonis Samaras - possibly Greece's next PM - of 2 years of severe austerity which has brought the country's debt/GDP ratio from 120% to 168%. In what sounds like the beginnings of a push to redo the rescue program, Samaras says austerity cannot work without "measures to assist recovery and promote sustainable growth." [View news story]
AIG Shares Fail To Reflect Improving Fundamentals [View article]
Navios Acquisition: Unwinding The Spin [View article]
My opinion is that the combination of secured lenders with just enough good collateral, too many unsecured interested third parties (charterers) that threaten banks' position and a stingy and selfish main shareholder (G. Panagiotedes) means that Torm's current equity is worthless, even after a restructuring.
Navios Acquisition: Unwinding The Spin [View article]
Knightsbridge: Is the Tanker Company Targeting an Acquisition? [View article]
Get On Board The Iron Ore Train [View article]
I'm interested in Fortescue indirectly, through Compagnie Maritime Belge, which is still sitting on 38m FMG shares, some of them issued to CMB @ AUD2 at end-2008, some of them @AUD4.3 at end-2009 and the AUD has rocketed since then. Hope FMG does well.
Overseas Shipholding Group: Why Now Is a Great Time to Buy [View article]
Navios Acquisition: Unwinding The Spin [View article]
Why Vestas Is Undervalued [View article]
I don't know what the ADRs represent, but each of the 203m Copenhagen shares have been trading at DKK50-60 so around $8-10. The current market cap is EUR1.6b. I sense from one of your points ("expected operating profit" in the first bull argument) that the current market cap is not fully acknowledged - correct me if I'm wrong. This would mean that you need to adapt your arguments to a price triple of that of the ADR - perhaps you would even change your mind a bit.
In 2007 Vestas was trading at 120x earnings and even in 2010 it was at 30x. It is natural to take a look when the price comes back down to earth. Personally I did take quick look back in November but let it go.
Safe Bulkers Still Has Attractive Risk/Reward [View article]
I'm not a fan of the dividend and I'm worried that there may be another badly executed spring secondary offering so personally I recently reduced my position. But in contrast to many other companies in the sector, SB seems really safe to me for the very long term.