einstein p fleet

A Fresh Look at Shipping Company Stocks

Just picked up some more FRO at 30, to average down. Had sold it a while back. When it dropped into the low 40s I thought it was a good buy. Who knew? I wanted a stock with yield that I could sit with for a while and this one fits the bill.

I just bought some OCNF the other day. Owned the stock a long time ago based on a Cramer recommendation and sold out in the mid twenties. Surprised to see it trading at 7 --- but the entire dry bulk shipping group has plummeted along with the index. With high yields come high risk, but I'm betting that China will have to import coal and grain sooner than later and the index will stabilize. While the world economy slows, China may very well put people to work building infrastructure and restructuring their current farming system.

One has to wonder if there will not be consolidation in the industry at these prices. Personally, I think you will see a lot of M&A activity in the basic material space, as well as the shippers and infrastructure companies.

I used to be scared of buying stocks will crazy dividend yields. I bought Fording Coal (FDG) at 19 when it was yielding over 20%. Sold it at 21, thinking the yield was too good to be true. Regretted that one. Still do.

This market sell off has created some very interesting opportunities if you have the money and patience to play, not to mention a cast iron stomach. Back to the buy and hold strategy. I think we used to call it investing.