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Sava

 
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  • StealthGas: Hungry For A Buyback [View article]
    By loading up on ships "before the rest of the LPG sector creates a glut of shipping just like the greedy shippers in the other sectors" GASS is contributing to a coming glut that will be painful for them too.
    Mar 14 06:38 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    Or start paying a dividend.
    Nov 8 04:44 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    I for a long time was a believer in this net asset value/book value argument, but I am not totally anymore. It would be more clear cut if LPG carriers were a very liquid market, but its very illiquid. I don't think, that the book value will ever be realized because cash-flow is ultimately a more important measure of worth if there is never any prospect of a buy-out or massive asset sales. As it makes economic sense to sale the oldest vessels, the newest non-depreciated ships that make up the majority of the fleet value just produce cash flow and are probably never going to be sold (and if you tried to sell them, good luck selling them at full price). Unless the chartering market globally continues to improve (more people start using LPG products) which should happen gradually, the fundamentals really don't support a stock value above $8-$10.
    Nov 7 03:10 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    Mr Vafias is the largest shareholder of Stealthgas. Are you claiming he isn't aligned with himself? (what Wall Street perceives as good might not always be best, even if the short term share price doesn't go up more)
    Nov 7 09:43 AM | Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    I'm actually happy with his latest video interview. By the end of the year he will have either bought back a ton of shares or reinstated a dividend if the share price has appreciated a lot.
    May 23 11:58 PM | Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    I like your thought process Halflink, if there is one thing I know that makes GASS different, it LPG handysize niche it fills. Assuming Harry isn't lying and has access to decent information (I believe both those assumptions) his company's main assets aren't going to become worth much less because of the lack of supply of LPG handysize ships for the next couple years. It will definitely be key to see how they are able to handle maturing debt for a longer term perspective on being a shareholder.
    Mar 19 11:06 PM | Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    When 2008 did happen, they had no problem servicing their debt? Energy demand is pretty inflexible. People still need LPG shipped even in a world depression. Gass operated profitable, it only took a very large non-cash impairment charge because the value of its tankers took a very large hit, which put it in violation of one of its debt convenants relating to the asset value to debt ratio. Nevertheless, GASS was still profitable.

    Harry also has interest rate hedges in case rates increase as a lot of his debt is based of LIBOR but I think a good portion is a fixed rate.
    Mar 13 01:10 AM | Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    Unless the beach house produces income, they are fundamentally different. A beach house derives its value from its location, size, etc...; a ship derives its value from its income producing potential + scrap value. I think this will become more significant in the next year or two as Handy Size rates should go up very nicely as demand rises slightly and the worldwide fleet size decreases.

    I think there is one thing we can all agree on: Harry should USE the buyback program before the shares get more valuable. I personally think the market has begun to recognize none of GASS's business is really effected by the Greek economy.
    Mar 1 11:07 PM | Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    Correction to previous comment:
    The Vafias family owns more than 10% I think it is more like 19% but I forget the exact number.
    Mar 1 02:41 AM | 1 Like Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    I understand your critique that says you can't have it both ways, being conservative with cash and increasing leverage. However, I am not sure he has to increase leverage to expand the fleet. It seems like he remains committed to being below 50% at very low rates. If he bought one or two ships a year with 30% cash I think leverage would stay the same due to payments on existing debt.

    I am curious to see the profit that was made on Gas Kalogeros, if it is significant, I will have no problem with it.

    Also, the reason Mr. Vafias is sad that his share price is low is that his family owns 10% of it. Even though, yes he "should be glad" for the opportunity to retire shares through a buyback program, but his liquid net worth has suffered a lot since the shares were $15. There needs to be a lot of quarters above 25 cents a share in earnings if he ever wants the shares to reflect the NAV of $14. I think $8 is probably a better target to sell at as a reflection of realized value.

    Also, you could not just as easily say the crisis in Greece will be resolved. The greek economy is falling apart. Go read zerohedge or just type in Greece to google news. Corruption, Striking, Collapsing GDP and tax revenue. They have defaulted on their bonds, just waiting to see who, how, and when the pain will be felt for private investors. Harry Vafias is living in the middle of it.

    Whether any of that will have an effect on the price of GASS remains to be seen.

    To your question about the beach house: in your example I would buy my partners share. However, GASS isn't a beach house and buying back shares does not make it more profitable and does not make it a better business. It does provide a service for shareholders.

    I do sincerely hope that $50 million buyback program is utilized to its fullest as well, I just think it still represents a good investment at its current price even without the buyback program.
    Feb 29 11:47 PM | 2 Likes Like |Link to Comment
  • Stealthgas: Company Hits A Crossroads [View article]
    Interesting article Steven,

    I do have a couple of points I'd like to bring up about it though.

    On share buybacks: CEO Harry Vafias believes, with perhaps some justification, that the Greek/euro crises is going to lead to an even greater depressed share price at some time in the future. Being as conservative as he is, he feels uncomfortable using the money with that intuition. Anyway, he could still buy back almost half the market capitalization tomorrow.

    On the sale of the Gas Kalogeros: I think you have interpreted this event in the wrong light. Think of buying GASS shares as an arbitrage between what public and private market buyers are willing to pay for its ships. In this case, Harry is selling things that can be purchased for a 75% discount in the form of GASS shares for a gain on the stated value of the ships in the form of private market transactions. This will dramatically increase the cash position, lower the debt/asset ratio, and hopefully help realize value.

    On buying ships/increasing debt: I think you underestimate the desire of central banks to keep interest rates at all time lows. The inelesticity of demand for energy products like LPG provides safety for assets like LPG carriers even in a recession. Stealthgas is ultimately a company that desires and needs to make money through owning ships and chartering them out. They main way for them to grow is to purchase ships. If this can be done with a very nice return on investment, as the current circumstances allow then Harry should be thinking about growth. Ships are ultimately better cash producers than cash doing nothing. With debt being so cheap right now, I am sure the return on equity looks quite attractive.

    Anyway, thank you for the article!
    Feb 29 08:53 AM | 2 Likes Like |Link to Comment
  • Stealthgas: Below $5, It's a Steal [View article]
    Put most simply, the analogy with US telecom companies makes no sense because a US telecom company is primarily conducting business is the US. Stealthgas does no business with/in Greece besides employing individuals and renting office space (with a possible exception: a couple of ships are chartered in the mediteranean). Their source of revenue, their taxation, their debt, and their acquisitions have very little to do with Greece. Most of their ships are chartered in Asia.
    Aug 20 03:40 PM | Likes Like |Link to Comment
  • Stealthgas: Below $5, It's a Steal [View article]
    Moon Kil Woong,
    Please tell me how their debt is effected by the debt crises in Europe. Or for that matter their taxes. Are their any historical precedents? What part of their business is dependent on the Greek economy (because as far as I know, thats where their administrative office is, and that is about it, so maybe rent?)?

    You speculated that their debt must be "getting frustratingly expensive," can you give me any actual evidence to back this up? Some of their debt has literally become cheaper (Which made their hedges lose value). Please help me out, because I don't follow, maybe you should actually go read all of their debt covenants, before making comments based on speculaiton...
    Aug 18 11:40 AM | Likes Like |Link to Comment
  • Stealthgas: Below $5, It's a Steal [View article]
    Interesting thoughts, but I do not think it works like that. I imagine it would be rather inconvenient for their ships operating near Japan and other far east locales, or Brazil for that matter, to go to Greece for repairs and maintanence. The only currency risk they have versus USD is Yen for ships they are currently building in Japan. As far as I know, almost all Greek shipping companies are actually based in the Marshall Islands, there has been at least one good Wall Street Journal opinion written by a Greek shipping executive about this phenomenon and his perspective on the Greek financial crises. It was in the July 13th 2011 WSJ.
    Aug 17 09:53 AM | Likes Like |Link to Comment
  • Stealthgas: Below $5, It's a Steal [View article]
    Beyond that, a decent portion of their debt that is based off Libor is hedged, which has been hurting them, because the interest rates have only been getting lower. Their lenders are banks like BNP Paribas, Deutsche, etc... Their clients are not Greek, their shipbuilders aren't Greek, please tell me how they are more exposed to Greece than any other international company? They have absolutely no trouble meeting their debt as is, and the way their debt is structured is quarterly payments for several years, and then a balloon payment on the last payment. Their two earliest balloon payments come due in 2014, then one in 2015, four in 2016, one in 2017, one in 2019 and three in 2020. I don't see how they would have any trouble meeting any debt payment until at soonest 2014 and I honestly expect those to be non-issues. The 33 million in cash they have now, does not include the restricted cash they keep to meet upcoming payments.
    Aug 16 02:51 PM | Likes Like |Link to Comment
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