Genco Shipping & Trading Could Use Some Extra Cash [View article]
""I think it's ridiculous that Genco is valued at just 60 million. 53 vessels must be worth much more than that.""
Yes, those ships are worth around $840 million. Unfortunately, they have loans against them for $1.6 billion. Which is why they have been in breach of loan covenants. Which is why they will need to restructure their debts. Which is why the share price is so low. Because there will be nothing left for shareholders.
You should look up the costs related to a "warm layup" of a ship. And a "cold lay up".
But most importantly. A ship that is laid up does not generate commissions for Peter.
Shipping: This Rally Doesn't Add Up [View article]
You've got to be kidding.
Diana has more cash than debt. And has never been in breach of loan covenants. Or needed a reverse split to keep from being delisted.
EGLE has far more debt than asset value. And has had to make a desperate deal with it's lenders because it doesn't make enough earnings to pay it's bills.
Very soon, one of the shipping analysts will explain this earnings "beat" to the masses. And the one time settlement and the amortization of below market charters will be exposed for the folly that they are.
You bottom pickers are going to lose your shirts if you don't take your profits before they vaporize.
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
Millions of shares of dry bulk companies were traded the other day, in a knee jerk reaction to what "investors" perceived to be a better than expected earnings report from EGLE.
How long will it take them to realize that the "beat" was because of a one-time settlement with a company that defaulted on charters. The settlement was for $33 million and without it, EGLE had a huge loss, as expected. Business is horrible in the dry bulk sector in general. And for EGLE in particular.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
Yes EXM is small fry. Since EXM has $1.4 billion in debt. EXM has 39 ships, with carrying capacity of 3.6 million dwt. They are small. So is EGLE. TBSI had 52 old rust buckets, and I don't remember how much dwt. Nor do I care.
My reference to those companies has nothing to do with the make up of their fleets. I'm talking about the DEALS they make with lenders.
If anything, the fact that lenders did foreclose on that old small fleet of tweendeckers and handies from TBSI. Then the lenders would definitely take the new Supras from EGLE. And I am not suggesting bankruptcy for EGLE. I'm talking about the DEALS that have been made with lenders, and the DEALS that will be made with lenders. And how they have left the management with something and the Banks with something, and shareholders with nothing. They will also get diluted. Massively.
When the market figures out that EGLE's beat on earnings was only because of a one-time item. And that without it, EGLE lost money again, as expected. Then the share price will fall. The fact that several dry bulk shipping companies had huge rallies after EGLE's earnings, shows that the market doesn't have a clue about shipping. The BDI is falling, and will continue to do so this summer.
Imminent Dividend Cut At Diana Containerships [View article]
You know Dingy,
As long as you refuse to do any real research for yourself. You can close your eyes and call everything untrue. Because if you never see the real facts for yourself, you can deny their existence.
Enjoy being oblivious. As you bask in your ignorance.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
I'm aware of the cycles of the shipping industry. The one reason why the BDI bubble of 2007-08 is unprecedented is because of the inclusion of China into the WTO. China and it's voracious appetite for raw materials is also responsible for the rapid growth of the other countries in the so called emerging markets. BRIC Find another country that could possibly emerge, and have as significant an impact as that. The world was simply not ready for that. The worldwide fleet is now ready for a 20% increase in demand, and the worlds shipyards are now efficient enough to ramp up and launch 100 million dwt of bulk ships per year. Sure, the bottom of shipping cycles happens when a glut of ships causes orders to stop, and deliveries to end. And after a period of rate stagnation, the demand starts to outstrip supply. Anf the cycle starts again.
I've heard a lot of people calling the bottom for the last four years. Deliveries haven't stopped, and they haven't slowed below the rate of demand, even including scrapping. As for scrapping, it continues at a high pace, but there is still a net gain in the size of the fleet. And don't expect owners to keep scrapping ships less than 20 years old after rates climb to profitable levels.
And again, the cycle was not what I was debating. My point is that by the time rates reach profitable levels, several of the companies in dry bulk will have huge payments that were put off for years. They already have higher interest rates as part of their debt negotiations. And they are likely to be facing massive dilution.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
You should look into the deal that TBSI made with it's lenders. The Banks got the ships. The CEO got to continue managing the fleet. And the shareholders got the shaft. If you want a clue as to how shareholders can get screwed, watch what happens to EXM.
Well, I would question whether these experienced investors, are experienced with shipping. You haven't specifically researched the supply issues of Iron Ore being shipped into China. Such as, more is coming from Australia, and less from Brazil. Which reduces tonne miles.
And the most optimistic estimates for an increase in shipments of Iron Ore into China, pale in comparison to the continuing arrival of newly built ships to service those imports. The Valemax ships arriving could handle the increase just by themselves. Add in the VLOC's and Capesize ships being built, and they will be oversupplied with ships for years. And by the way, the optimism has recently been downgraded.
There have been record amounts of of iron ore being shipped. Last Fall, at the same time as the charter rates for shipping iron ore fell to a 15 year low, there were record amounts of deliveries to China. The glut is that bad. And it overwhelms all else.
At best, rates will be slightly above break even. Unfortunately, due to it's debt, DRYS will have a higher break even than other shippers.
It would take many pages to go into the details of the issues pertaining to DRYS. I've written many pages about it. DRYS will perform much as it has for the last four years.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
The share offering is a given. I have no idea why you think that will be anything but a detriment to share price. It will take a massive share sale to bring them in line with covenants.
Share sales are only received positively if they lead to accretive acquisitions. Not when the money goes to just paying down debt. And this is not the kind of debt payment that leads to a better balance sheet. This payment will be merely to bring them in line with the drastic drop in asset values. There will be no improvement in shareholder equity.
DRYS was up because EGLE had a higher than expected earnings. Which was completely the result of a one time settlement with Korea Lines, who defaulted on charters for a slew of EGLE ships. Without that one time item, EGLE's earnings were horrible. As expected.
The fact that so many other dry bulk companies had such price increases shows how woefully uninformed the traders are who bought them.
Comparing DRYS to Maersk is absurd. Maersk is one of the biggest container shippers in the world with a completely different business model. What's good for Containers is by no means good for dry bulk. A pick up in the demand for containerized freight is not a reflection of a pick up in bulk. Even a pick up in the economy is by no means a significant relief for the dry bulk sector. The seaborne transporting of dry bulk goods has risen far above where it was in 2007-08, the peak for charter rates. The dry bulk sector suffers from a massive oversupply of ships. And DRYS suffers from a massive debt. And mismanagement.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
I don't need the links, I've been in bulk shipping since 2006. What you are referring to is the book value listed on the ER. And the book value is the price paid for the ships minus accumulated depreciation. Eventually they will have to take an impairment, most other shippers already have. The prices paid for 22 of those ships was $41 million each. That's too bad because you can buy a brand new Supra now for $25 million.
If you are going to call out that other author for his ship valuation then you should be concerned about actual ship values. The fact that EGLE has debt that far exceeds the resale value of it's fleet is far more important than it's stated book value. That is why EGLE was in violation of it's collateral maintenance ratio. That is why it had to renegotiate with it's lenders. That deal with lenders was not a cakewalk. Read it. Yes the banks do not want to foreclose on those ships. But the deal may leave very little to shareholders in 2017.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
MR is a medium range tanker, not a company. Wilbur Ross took a large stake in Diamond S. A product tanker company. And he is investing in LNG tankers. Not Dry Bulk. If he ever does buy into dry bulk, he would buy the distressed assets, not the distressed companies.
Are you seriously going to lump all shipping into one. I wouldn't even lump all tankers with other size tankers, if you want to make an accurate analysis of a company. Same with dry Bulk. EGLEE owns all Supramax. Yes it has two Handies. DSX has mostly Capes and Panamax. And the future is different for each size.
You think when Containerships, or tankers, or car carriers, start doing better, then so will dry bulk? They are completely different, and have different demand metrics. One thing they do have in common is a massive glut of ships that have reduced charter rates to below break even.
You didn't make a single reference to the supply glut, and it is the single most important factor in this sector.
I have no idea where you are getting your ship valuations. But you should get them from the shipbrokers, who record the sales of ships. Try this one: http://bit.ly/12hlho8 or http://bit.ly/sdP9nU Where you will find that a 5 year old Japanese built Supra is worth $20 million, and a 10 year old Japanese built Supra is worth $15 million. Japanese built ships have higher resale value. EGLE has a fleet list so you can do the work yourself. So the $800 million fleet value stated before is accurate.
But given some of the wild statements made by you in your article. It appears this conversation is not worth having. EGLE never had a share price of over $100. Any thoughts about this company being worth $400 per share is absurd. The perfect storm of events that led to those astronomical rates in 2007 was a one time event. The dry bulk sector will be oversupplied for at least the next three years. After that, the supply demand ratio may meet parity. But since 9 million dwt. more ships have been ordered already this year, then reaching the point where there is a shortage of ships like 2007 is a fantasy.
MTF, Your profile says you are a swing trader. In which case I would assume you would take your profit today. Congratulations if you did. Today's jump was merely a result of an earnings report from EGLE, which apparently no one really attempted to read. There was a one time gain from a settlement on defaulted charters. Their situation remains grim. For "investors" to somehow plunge into shipping stocks, based on that, shows a complete ignorance of the shipping sector.
Your article attempts a fundamental analysis, and a longer term outlook. First, you are using the consolidated earnings reports for ORIG and DRYS, to state that there was a revenue increase. But the dry bulk and tanker segment has had no such increase. Just the drill rig segment, and it is solely the result of an increase in drill ships, not revenue per ship. ORIG revenue means nothing to DRYS shareholders, only ORIG's share price. It is just currency. And every time DRYS sells it's shares of ORIG, the value of DRYS goes down.
And charter rates are not on the rise. I suppose on some weekly time frame there might have been a slight uptrend. But, rates are not rising, and the futures contracts for rates this summer are worse. This summer will suck, try reading a shipping publication. There was a recent, temporary rally, from the port congestion when there was a bumper crop of soybeans, which had the effect of raising Panamax and Supramax rates all the way up to not quite break even. A slight, and temporary bump in Cape rates to about half of break even.
Calling DRYS ships young, is a stretch. Their dry bulk ships average 8.4 years old. The sector average is 10.6 years old. Certainly not a competitive advantage. Diana is younger, so is EGLE, and Navios And DRYS expenses are high because of their interest and finance charges, as well as far too many fees charged by George. They pay higher interest margin because of their multiple breaches of loan covenants.
Diversification only helps if the tanker sector was supporting the dry bulk sector during a lull in bulk charter rates. Or, vice versa. That's not happening. Both sectors are oversupplied, and while demand is expected to increase, the rise is not expected to outpace supply for some time. For now, diversification just means, misery loves company.
The troubling issues that are specific to DRYS are far more damaging than any perceived improvement in the sector, or the economy. And the outlook for the sector and the economy, continue to be downgraded.
Eagle Bulk Shipping: Enjoy The Good News For Now, But Tread Very Carefully [View article]
This jump in share price is laughable. Perhaps Soph didn't emphasize enough the fact that this is a one time item. A settlement from a bankrupt company that defaulted on their charters. And shares of a company emerging from bankruptcy, into a still dismal sector. That's encouraging. And they intend to value the amortization of above and below market charters as revenue? EXM pulled that charade for years, before it was realized as folly. EGLE still has a dismal future. RBS sweeps all cash above $20 million. The deal they made with lenders pushed principle payments out two years. Leading to a sizable, lump sum payment. Which they have no chance of paying.
Genco Shipping & Trading Could Use Some Extra Cash [View article]
""I think it's ridiculous that Genco is valued at just 60 million. 53 vessels must be worth much more than that.""
Yes, those ships are worth around $840 million.
Unfortunately, they have loans against them for $1.6 billion.
Which is why they have been in breach of loan covenants.
Which is why they will need to restructure their debts.
Which is why the share price is so low.
Because there will be nothing left for shareholders.
You should look up the costs related to a "warm layup" of a ship.
And a "cold lay up".
But most importantly.
A ship that is laid up does not generate commissions for Peter.
Shipping: This Rally Doesn't Add Up [View article]
Diana has more cash than debt.
And has never been in breach of loan covenants.
Or needed a reverse split to keep from being delisted.
EGLE has far more debt than asset value.
And has had to make a desperate deal with it's lenders because it doesn't make enough earnings to pay it's bills.
Very soon, one of the shipping analysts will explain this earnings "beat" to the masses.
And the one time settlement and the amortization of below market charters will be exposed for the folly that they are.
You bottom pickers are going to lose your shirts if you don't take your profits before they vaporize.
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
Millions of shares of dry bulk companies were traded the other day, in a knee jerk reaction to what "investors" perceived to be a better than expected earnings report from EGLE.
How long will it take them to realize that the "beat" was because of a one-time settlement with a company that defaulted on charters.
The settlement was for $33 million and without it, EGLE had a huge loss, as expected.
Business is horrible in the dry bulk sector in general.
And for EGLE in particular.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
Since EXM has $1.4 billion in debt.
EXM has 39 ships, with carrying capacity of 3.6 million dwt.
They are small.
So is EGLE.
TBSI had 52 old rust buckets, and I don't remember how much dwt.
Nor do I care.
My reference to those companies has nothing to do with the make up of their fleets.
I'm talking about the DEALS they make with lenders.
If anything, the fact that lenders did foreclose on that old small fleet of tweendeckers and handies from TBSI.
Then the lenders would definitely take the new Supras from EGLE.
And I am not suggesting bankruptcy for EGLE.
I'm talking about the DEALS that have been made with lenders, and the DEALS that will be made with lenders.
And how they have left the management with something and the Banks with something, and shareholders with nothing.
They will also get diluted.
Massively.
When the market figures out that EGLE's beat on earnings was only because of a one-time item.
And that without it, EGLE lost money again, as expected.
Then the share price will fall.
The fact that several dry bulk shipping companies had huge rallies after EGLE's earnings, shows that the market doesn't have a clue about shipping.
The BDI is falling, and will continue to do so this summer.
Imminent Dividend Cut At Diana Containerships [View article]
As long as you refuse to do any real research for yourself.
You can close your eyes and call everything untrue.
Because if you never see the real facts for yourself, you can deny their existence.
Enjoy being oblivious.
As you bask in your ignorance.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
I'm aware of the cycles of the shipping industry.
The one reason why the BDI bubble of 2007-08 is unprecedented is because of the inclusion of China into the WTO.
China and it's voracious appetite for raw materials is also responsible for the rapid growth of the other countries in the so called emerging markets. BRIC
Find another country that could possibly emerge, and have as significant an impact as that.
The world was simply not ready for that.
The worldwide fleet is now ready for a 20% increase in demand, and the worlds shipyards are now efficient enough to ramp up and launch 100 million dwt of bulk ships per year.
Sure, the bottom of shipping cycles happens when a glut of ships causes orders to stop, and deliveries to end. And after a period of rate stagnation, the demand starts to outstrip supply. Anf the cycle starts again.
I've heard a lot of people calling the bottom for the last four years.
Deliveries haven't stopped, and they haven't slowed below the rate of demand, even including scrapping.
As for scrapping, it continues at a high pace, but there is still a net gain in the size of the fleet.
And don't expect owners to keep scrapping ships less than 20 years old after rates climb to profitable levels.
And again, the cycle was not what I was debating.
My point is that by the time rates reach profitable levels, several of the companies in dry bulk will have huge payments that were put off for years. They already have higher interest rates as part of their debt negotiations. And they are likely to be facing massive dilution.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
You should look into the deal that TBSI made with it's lenders.
The Banks got the ships.
The CEO got to continue managing the fleet.
And the shareholders got the shaft.
If you want a clue as to how shareholders can get screwed, watch what happens to EXM.
Elegant Solution For DryShips And Ocean Rig [View article]
""The problem is that the biggest buyers in the world actually don't have any money. They just pretend they do."""
You are talking about Donald Trump, right?
The Bottom Is Here With DryShips [View article]
You haven't specifically researched the supply issues of Iron Ore being shipped into China.
Such as, more is coming from Australia, and less from Brazil.
Which reduces tonne miles.
And the most optimistic estimates for an increase in shipments of Iron Ore into China, pale in comparison to the continuing arrival of newly built ships to service those imports.
The Valemax ships arriving could handle the increase just by themselves.
Add in the VLOC's and Capesize ships being built, and they will be oversupplied with ships for years.
And by the way, the optimism has recently been downgraded.
There have been record amounts of of iron ore being shipped.
Last Fall, at the same time as the charter rates for shipping iron ore fell to a 15 year low, there were record amounts of deliveries to China.
The glut is that bad. And it overwhelms all else.
At best, rates will be slightly above break even.
Unfortunately, due to it's debt, DRYS will have a higher break even than other shippers.
It would take many pages to go into the details of the issues pertaining to DRYS.
I've written many pages about it.
DRYS will perform much as it has for the last four years.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
The share offering is a given.
I have no idea why you think that will be anything but a detriment to share price.
It will take a massive share sale to bring them in line with covenants.
Share sales are only received positively if they lead to accretive acquisitions.
Not when the money goes to just paying down debt.
And this is not the kind of debt payment that leads to a better balance sheet.
This payment will be merely to bring them in line with the drastic drop in asset values.
There will be no improvement in shareholder equity.
The Bottom Is Here With DryShips [View article]
DRYS was up because EGLE had a higher than expected earnings.
Which was completely the result of a one time settlement with Korea Lines, who defaulted on charters for a slew of EGLE ships.
Without that one time item, EGLE's earnings were horrible. As expected.
The fact that so many other dry bulk companies had such price increases shows how woefully uninformed the traders are who bought them.
Comparing DRYS to Maersk is absurd.
Maersk is one of the biggest container shippers in the world with a completely different business model.
What's good for Containers is by no means good for dry bulk.
A pick up in the demand for containerized freight is not a reflection of a pick up in bulk.
Even a pick up in the economy is by no means a significant relief for the dry bulk sector.
The seaborne transporting of dry bulk goods has risen far above where it was in 2007-08, the peak for charter rates.
The dry bulk sector suffers from a massive oversupply of ships.
And DRYS suffers from a massive debt.
And mismanagement.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
What you are referring to is the book value listed on the ER.
And the book value is the price paid for the ships minus accumulated depreciation.
Eventually they will have to take an impairment, most other shippers already have.
The prices paid for 22 of those ships was $41 million each. That's too bad because you can buy a brand new Supra now for $25 million.
If you are going to call out that other author for his ship valuation then you should be concerned about actual ship values.
The fact that EGLE has debt that far exceeds the resale value of it's fleet is far more important than it's stated book value.
That is why EGLE was in violation of it's collateral maintenance ratio. That is why it had to renegotiate with it's lenders.
That deal with lenders was not a cakewalk.
Read it.
Yes the banks do not want to foreclose on those ships.
But the deal may leave very little to shareholders in 2017.
Eagle Sinks On Inaccurate Reporting: Banks Need Shippers Badly [View article]
Wilbur Ross took a large stake in Diamond S.
A product tanker company.
And he is investing in LNG tankers.
Not Dry Bulk.
If he ever does buy into dry bulk, he would buy the distressed assets, not the distressed companies.
Are you seriously going to lump all shipping into one.
I wouldn't even lump all tankers with other size tankers, if you want to make an accurate analysis of a company.
Same with dry Bulk.
EGLEE owns all Supramax. Yes it has two Handies.
DSX has mostly Capes and Panamax.
And the future is different for each size.
You think when Containerships, or tankers, or car carriers, start doing better, then so will dry bulk?
They are completely different, and have different demand metrics.
One thing they do have in common is a massive glut of ships that have reduced charter rates to below break even.
You didn't make a single reference to the supply glut, and it is the single most important factor in this sector.
I have no idea where you are getting your ship valuations.
But you should get them from the shipbrokers, who record the sales of ships.
Try this one: http://bit.ly/12hlho8
or http://bit.ly/sdP9nU
Where you will find that a 5 year old Japanese built Supra is worth $20 million, and a 10 year old Japanese built Supra is worth $15 million.
Japanese built ships have higher resale value.
EGLE has a fleet list so you can do the work yourself.
So the $800 million fleet value stated before is accurate.
But given some of the wild statements made by you in your article.
It appears this conversation is not worth having.
EGLE never had a share price of over $100.
Any thoughts about this company being worth $400 per share is absurd.
The perfect storm of events that led to those astronomical rates in 2007 was a one time event.
The dry bulk sector will be oversupplied for at least the next three years.
After that, the supply demand ratio may meet parity.
But since 9 million dwt. more ships have been ordered already this year, then reaching the point where there is a shortage of ships like 2007 is a fantasy.
The Bottom Is Here With DryShips [View article]
Your profile says you are a swing trader.
In which case I would assume you would take your profit today.
Congratulations if you did.
Today's jump was merely a result of an earnings report from EGLE, which apparently no one really attempted to read.
There was a one time gain from a settlement on defaulted charters. Their situation remains grim.
For "investors" to somehow plunge into shipping stocks, based on that, shows a complete ignorance of the shipping sector.
Your article attempts a fundamental analysis, and a longer term outlook.
First, you are using the consolidated earnings reports for ORIG and DRYS, to state that there was a revenue increase.
But the dry bulk and tanker segment has had no such increase.
Just the drill rig segment, and it is solely the result of an increase in drill ships, not revenue per ship.
ORIG revenue means nothing to DRYS shareholders, only ORIG's share price. It is just currency.
And every time DRYS sells it's shares of ORIG, the value of DRYS goes down.
And charter rates are not on the rise.
I suppose on some weekly time frame there might have been a slight uptrend.
But, rates are not rising, and the futures contracts for rates this summer are worse.
This summer will suck, try reading a shipping publication.
There was a recent, temporary rally, from the port congestion when there was a bumper crop of soybeans, which had the effect of raising Panamax and Supramax rates all the way up to not quite break even. A slight, and temporary bump in Cape rates to about half of break even.
Calling DRYS ships young, is a stretch.
Their dry bulk ships average 8.4 years old.
The sector average is 10.6 years old.
Certainly not a competitive advantage.
Diana is younger, so is EGLE, and Navios
And DRYS expenses are high because of their interest and finance charges, as well as far too many fees charged by George.
They pay higher interest margin because of their multiple breaches of loan covenants.
Diversification only helps if the tanker sector was supporting the dry bulk sector during a lull in bulk charter rates.
Or, vice versa.
That's not happening.
Both sectors are oversupplied, and while demand is expected to increase, the rise is not expected to outpace supply for some time.
For now, diversification just means, misery loves company.
The troubling issues that are specific to DRYS are far more damaging than any perceived improvement in the sector, or the economy.
And the outlook for the sector and the economy, continue to be downgraded.
Eagle Bulk Shipping: Enjoy The Good News For Now, But Tread Very Carefully [View article]
Perhaps Soph didn't emphasize enough the fact that this is a one time item.
A settlement from a bankrupt company that defaulted on their charters.
And shares of a company emerging from bankruptcy, into a still dismal sector.
That's encouraging.
And they intend to value the amortization of above and below market charters as revenue?
EXM pulled that charade for years, before it was realized as folly.
EGLE still has a dismal future.
RBS sweeps all cash above $20 million.
The deal they made with lenders pushed principle payments out two years.
Leading to a sizable, lump sum payment.
Which they have no chance of paying.