Zachary Scheidt

Excel Maritime Carriers: Set Up To Excel

China has actually already begun importing iron ore. This is part of the catalyst that is driving dry bulk rates higher.

While book value may not be exact, for many of these companies, book value is actually very conservative. That is because they purchased ships and carry the ships at cost less depreciated value. Since many of the ships have been depreciated to a much lower level (accounting) the book value is likely very close to economic value.

Thanks for the good article - best of luck with these names.
Zach
zachstocks.com

2009: Watch the Baltic Dry Index

The severe weakness in the BDI may offer strong opportunities in shipping names. But not every shipper is created equally. Some leveraged and aggressive companies have gotten hit much harder than competitors with long-term contracts and manageable debt levels.

Ironically, the aggressive players that survive (I think we will see a handfull of bankruptcies in this sector) will actually be the fastest to rebound. This is because of A) their lower current prices, and B) a more drastic change in analyst assumptions due to the business model - or leverage.

The temptation is to chase dividend yield and quite honestly dividends are an important part of owning shippers. However, due diligence is in order because many will not be able to maintain current dividend policies.

In short - the area is ripe for significant profits in 2009. However, there are a few land mines that must be avoided.

Happy New Year and best of luck to all in 2009.
Zach
zachstocks.com

Diana Shipping: Prime Rebound Candidate

Hey all,

Thanks for the comments - a lot of very astute followers of Diana and the other shippers out there. I obviously haven't published the pages and pages of analytics necessary to fully cover this industry, but hopefully my comments give a basis from which to launch a more thorough analytical process. You may be interested in looking at my previous article on DSX from January.

Jim-Bob,

I have to respectfully disagree with you in that the smaller investor actually can have an advantage in this market. With the volatility increasing and the swings occurring quickly, smaller investors can sweep in and take a meaningful position (long or short) when fear or greed push prices out of balance where it takes larger institutions much longer to build their positions to a meaningful size.

All - good luck trading this market and thanks for the good spirited discussion!