TBS International Ltd. (TBSI)

All Comments on TBSI

  • commenter
    David White
    Jun 24 01:44 PM
    Good News For Dry Bulk Shipping [view article]
    According to a MArketwatch article today, the RTP agreement also applies to BHP. Also Nippon Steel apparently is accepting the agreement. This should bode extremely well for dry bulk shippers. Reply
  • commenter
    David White
    Jun 24 01:27 PM
    Good News For Dry Bulk Shipping [view article]
    Another thing to note is that NM and SBLK have little to no short interest at this point ( <= 2%). DRYS, EXM, and TBSI do have 10% or more short interest. However, they are so highly traded that this can apparently be covered in less than a day (TD Ameritrade data).

    All of these stocks seem to be good values plays, although some are better than others. I have listed the P/E, P/S, P/B, and P/CF values for the stocks below (from TD Ameritrade):

    NM: 3.74, 1.0, 1.28, 3.2
    DRYS: 4.82, 4.49, 2.07, 4.89
    TBSI: 7.89, 2.43, 2.79, 5.93
    EXM: 6.8, 7.73, 1.74, 11.38
    SBLK: 26.76, 12.78, 1.37, NA

    I note the FPE of SBLK is 5.94.

    Obviously the ones with healthy cash flow are probably the best risks in a volatile market.     Reply
  • commenter
    retrobeast
    Jun 24 01:16 PM
    Good News For Dry Bulk Shipping [view article]
    all i know is drys will make you rich if you let it. Reply
  • commenter
    David White
    Jun 24 12:55 PM
    Good News For Dry Bulk Shipping [view article]
    I should point out that shippers are much more like trains than planes. They are a slower, but cheaper and more energy efficient way to transport huge heavy loads between countries separated by water. There is no real substitute. You have seen how well railroad stocks have done in the last year. Shippers are really in close to the same boat. They just don't have quite as much monopoly power as the railroads. After all, who can get the real estate to build more tracks? It would be virtually impossible for some of the long term tracks. The only real possibility would be to build new track next to the old ones on land the railroads already own. I have delineated some of the shippers' barriers to entry above. Reply
  • commenter
    David White
    Jun 24 12:19 PM
    Good News For Dry Bulk Shipping [view article]
    DRYS has a Beta of 3.0 and NM has a Beta of 1.8, so you can see they will likely explode if the market goes up. They are clearly positioned to do just that. If the market goes down, they will likely follow it, although reluctantly. To me this seems like a good risk/reward. I am hoping the market is about to rebound. What the Fed says tomorrow may impact that significantly. Reply
  • commenter
    David White
    Jun 24 11:51 AM
    Good News For Dry Bulk Shipping [view article]
    Further because the credit is so tight currently, it is barring most new entry into the shipping arena. This gives shippers good pricing power. Specifically both the buyers and the ship builders are having trouble getting the necessary credit to build new ships. Further the new ships have gone up in price (the steel for instance costs a lot more) dramatically in the last few years. This means that the current players in the market have a huge margin advantage over any new entries. This is another barrier to entry. Further companies such as NM have options to buy many of the ships in their "chartered in" fleets. These options are for the much lower ship prices. I believe NM is currently trading for less than 2 times book value, and it has a greater than 50% ROI. DRYS also has a greater than 50% ROI. New entries into the market will have a hard time matching these numbers. Reply
  • commenter
    David White
    Jun 24 11:33 AM
    Good News For Dry Bulk Shipping [view article]
    bill921: There is the fear that shippers will become like the arilines (i.e. less profitable with higher fuel costs). However, the prices of all commodities have been going up dramatically. Shipping prices are able to follow in line. The 200 day moving average on DRYS is still upward. In fact if you look at the chart, it looks like DRYS is at the bottom of a recent pullback. If the markets tank considerably from here. The bottom will likely be lower. If the markets start going up from here, DRYS is primed to at the very least reach its more recent highs of $95 and $110 approximately. It was even higher last year. Unless you are predicting a global recession, all of the hot economies will have to do a lot of shipping. It looks so far like the shipping costs can escalate with the commodity costs. DRYS has been doing mostly short term contracts, so it should not be very exposed to longer term movements in the price of fuel. DSX (longer term contracts) might be one to worry about, although I am not sure that fuel costs variances are not built into their contracts. You will have to look that up. Reply
  • commenter
    David White
    Jun 24 11:23 AM
    Good News For Dry Bulk Shipping [view article]
    billf921: I think the Drys also now has at least two more deep sea drilling rigs due for delivery in the next 1-2 years. These should add demonstrably to the bottom line. This area is so hot, you cannot get these rigs. I think the buy of this company was a fantastic purchase. Reply
  • commenter
    David White
    Jun 24 11:15 AM
    Good News For Dry Bulk Shipping [view article]
    RS also just raised its profit estimate for the 2Q significantly due to higher steel prices. If China is going to use the iron ore to manufacture steel for its infrastructure needs, this should be another spur to prod them into quickly resuming iron ore importation. It doesn't look like prices in this area are going lower in the near future. After the Olympic build out and the earthquake recovery, this may change a little. However, China still has a quickly growing economy. They will still need to import a lot of raw materials. Reply
  • commenter
    drys long
    Jun 24 11:13 AM
    Good News For Dry Bulk Shipping [view article]
    billf921 - can you run through how he grossly overpaid for OceanRig? I calculate a valuation of the company at around 8 times 2009 EBITDA - what do you get? Reply
  • commenter
    David White
    Jun 24 10:40 AM
    Good News For Dry Bulk Shipping [view article]
    The DJIA is currently at a longer term support level. If we have any luck, the markets will bounce up from here. Reply
  • commenter
    David White
    Jun 24 10:37 AM
    Good News For Dry Bulk Shipping [view article]
    NM just announced that it has agreed to acquire two new Ultra Handymax ships. If the shipping market were going south, the people who know most about it would likely not be investing more money in new ships. They obviously have the opposite viewpoint. Reply
  • commenter
    David White
    Jun 24 10:32 AM
    Good News For Dry Bulk Shipping [view article]
    I should add SBLK has a mean analyst rating of 1.7. Reply
  • commenter
    billf921
    Jun 24 10:31 AM
    Good News For Dry Bulk Shipping [view article]
    one other thing, as higher oil prices ripple thru the economy, a slowdown will happen. this slowdown will lowr dry bulk rates and profits

    you don't want to be in any bulker stock if and when that occurs     Reply
  • commenter
    David White
    Jun 24 10:25 AM
    Good News For Dry Bulk Shipping [view article]
    I should further point out that China is also short of coal at the moment. The above contract settlement (and the hopefully the soon to be done BHP one) may well act as a trigger to new contracts for shipping for coal importation. China defintinitely needs both of these materials for the Olympic build up and for earthquake recovery. Coal prices are currently much higher than 1 year ago. This may be part of the reason for the slowdown in coal importation by China recently. Still it looks like they simply have to have it, so I am expecting more shipping in this area too (very soon). Reply
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