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ramisle

ramisle
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  • Why DryShips Looks Ripe For A Turnaround [View article]
    The current stockpile of around 112 million tons would be 28-30 days supply for the steel mills.
    That is if the ore was removed on an orderly basis, based on the demand from mills.
    But it doesn't work that way. Some of the inventory , depending on who owns it, will sit there waiting for the highest price. Or is serving as collateral, and will sit there for awhile.
    Storage isn't free, and it isn't cheap. Some traders will lose their shirts, and the ore will be sold off.
    The steel mills have their own inventories at the mills.
    The port inventories are very often owned by traders, speculators, the miners, who also ship first, sell later.
    The reason the port inventories are so high is that the miners are holding back on buying for many reasons.
    Waiting for a lower price.
    Waiting for a line of credit.
    Waiting to clear inventory of finished steel.
    Chinese steel makers have been losing money for years, the government must be keeping them going.
    China is a different kind of Capitalist. The government is always involved, and manipulating, and assisting, to keep the whole mess running.
    Sep 14 07:47 PM | Likes Like |Link to Comment
  • Why DryShips Looks Ripe For A Turnaround [View article]
    Well, actually iron ore imports to China are up 10% over last year.
    The difference this year is, that the port inventories are over 100 million tons, and inventory at the mills is low.
    The cost basis on the port inventories is very high. Some of it serves as collateral on purchases of more ore. It gets complicated.
    I still look for a 4th quarter rally, but those port inventories represent about a months worth of supply.
    Steel demand is sluggish, but that's nothing new. With the price of imported ore this cheap, they'll ship it, someone will buy it, and domestic miners are shutting down.
    There are more than enough ships out there to handle this, still.
    But, eventually, there won't be enough ships, in the South Atlantic, when Vale needs them.
    Or, RIO and BHP want to hire everything available, to keep them away from Vale.
    And the grain season has the potential to be huge this year.
    And the the BDI will rally. But not for long.
    Sep 13 08:04 PM | 1 Like Like |Link to Comment
  • Why DryShips Looks Ripe For A Turnaround [View article]

    """We haven’t really had any global infrastructure development since the financial meltdown in 2008""".

    While it hasn't made any headlines as a development, the global seaborne transporting of wet and dry bulk products has DOUBLED, since 2008.

    Google it.
    Sep 12 06:39 PM | Likes Like |Link to Comment
  • Why DryShips Looks Ripe For A Turnaround [View article]
    I was one of the shareholders who were richly rewarded when DRYS hit a high of $131.40 back then.
    That doesn't negate the litany of self serving moves that destroyed anyone that held the stock after that.
    I'll have to assume that you are unaware of the fact that George in the second half of 2008, George, the CEO of private company Cardiff, sold 13 ships to George, the CEO of the publicly traded DRYS, for prices that were at the top of the market. Then, the orders were cancelled, and hundreds of millions of dollars were paid to Cardiff in penalties.
    To those apologists for George, who think that it was an honest mistake. George with his huge ego claimed in an interview the next year that he saw the downturn coming, and put the Capes on long term charters.
    Well, the Capes were put on long term charters BEFORE the sale of the ships.
    George and his sister own 100% of Cardiff.
    Shipbrokers called the penalties excessive, even if they weren't related party transactions.
    DRYS shares went from 40 million shares at that time, to 450 million shares today. Much of that money being wasted on continuing to purchase ships, and drastically overpay for his nephews company, (Oceanfreight), and more cancellations of ships.
    That's how you get a well deserved reputation for destroying shareholder value.
    It's stunning how people are so forgiving of a CEO, once they own the stock. There are several companies that handled the downturn far better than that. The Navios companies, and Diana for example.
    So no, DRYS wasn't just an unavoidable victim of the global crisis.
    You want to call the ORIG purchase a brilliant move? You'd better look at the total cost of the deal.
    They own $1.4 billion of a drilling company.
    And it only cost them $2.5 billion to get it.
    DRYS is a good trade. And if George starts working FOR shareholders again, they could do very well.
    Sep 12 08:04 AM | 2 Likes Like |Link to Comment
  • DryShips: It's Investors' Own Fault If They Don't See The Value In DryShips [View article]
    If you are literally talking about someone buying the entire company, and selling off the pieces, forget it.
    George has a poison pill on both companies.

    These valuation theories have been around as long as contrarian investors.
    DRYS used to own 97 million shares of ORIG that were worth $1.7 billion.
    It didn't keep DRYS market cap from falling under a $billion.

    The contrarians have been pumping dry bulk and coal stocks for years.
    I'm surprised they can still afford a broadband connection.

    DRYS will improve soon. The dividend from ORIG helps a lot.
    George will not sell ORIG to pay off the debt. He will maintain as much debt as the lenders will allow, he always has.

    But all this hype about the dry bulk turnaround is missing the reality that the fleet remains oversupplied. And the order book for dry bulk has again reached a point where the fleet will remain oversupplied.
    700 more dry bulk ships for 2015, and 600 more for 2016.......and growing.
    These guys never learn. And once private equity got involved......

    Enjoy the usual fourth quarter rally.
    And watch out for the usual first quarter collapse.
    Aug 8 02:02 PM | 1 Like Like |Link to Comment
  • DryShips May Not Be Capable Of Overcoming Weak Chinese Demand And A Large Debt Load [View article]

    ""I would say it should be brought up in EVERY article.""

    Only if they can manage to get the numbers right.
    Aug 6 03:50 PM | Likes Like |Link to Comment
  • DryShips May Not Be Capable Of Overcoming Weak Chinese Demand And A Large Debt Load [View article]

    The author has done little to no research.
    And whatever he did read, he certainly didn't understand.
    Such as this little gem:
    """Morgan Stanley commented on the falling iron ore shipments saying that with China cutting production, miners are shutting down every day with cheaper supplies increasing overseas."""

    Morgan Stanley is referring to the fact that China is cutting production of iron ore, and Chinese iron ore mills are shutting down. The reason they are doing so is that imported ore has dropped to a price that is cheaper than what the domestic mines can compete with.
    And that leads to more imports, and more demand for dry bulk ships.
    If you are going to get alarmed at a slight decrease in imports for June, as opposed to May, (as expected).
    Then I guess you'll be really excited when October comes, and iron ore, and grain imports soar, (as usual).
    Just a small amount of research would have showed you the usual seasonal demand and fluctuations in the BDI.
    Yes, the consolidated debt for DRYS and ORIG did go up markedly. That's what happens when you take delivery of some Ultra Deep Water drill rigs, that cost around $700 million each. And earn around $600,000 per day. You didn't mention that.

    And when you buy the company DRYS.
    You get the dry bulk and tanker segment, that carries a ""debt pile"" of $1.6 billion.
    The rest of the debt belongs to ORIG, a different company, you know, the one that has the UDW drill rigs.
    And DRYS gets a nice $15 million per quarter dividend from ORIG, to help pay for that ""debt pile"".

    Debt Pile? Makes me want to check for something sticking to the bottom of my shoes.
    Aug 6 03:43 PM | 2 Likes Like |Link to Comment
  • Dry Shipping Rates Tank, Time To Buy? [View article]
    ""With the exception of Ocean Rig (NASDAQ:ORIG), which has had some success in signing contracts the past couple of months, other dry shippers have had a dismal three months.""

    I have no idea why you keep putting ORIG in the same sector as dry bulk.
    Yes, DRYS, a dry bulk shipper does own 78 million shares of ORIG. But that doesn't mean that the stock of ORIG trades the same as dry bulk stocks.
    They are separate companies, no cross defaults.
    The BDI means no more to ORIG then it does to CSCO.
    ORIG is a deep water driller, and trades with that sector.
    It makes no sense to be mentioning them in an article about dry bulk. Their only significance is to DRYS. And only as an DRYS investment.
    Aug 6 02:46 PM | 1 Like Like |Link to Comment
  • Zacks' Bear Of The Day: DryShips [View article]
    Zacks had a #2 BUY ranking on GNK, just before Genco went bankrupt.
    Zacks also had a #2 BUY rank on EGLE, who will either go bankrupt, or get diluted into oblivion, in order to remedy their debt situation.
    The people at Zacks think that the shipping sector is UPS and Fedex.
    They were bullish on shipping for the last five years.
    Now that the remaining companies have a glimmer of hope, Zacks goes bearish.
    Aug 1 07:49 PM | Likes Like |Link to Comment
  • Paragon Shipping: Following Up With CEO Michael Bodouroglou [View article]

    Thank you again.
    There are two more points I would take Mike to task for.
    First he made the statement;

    """The loan earned 5% interest above Libor at a time when we did not need the cash and our bank deposits were paying us less than 0.1%."""

    Well, if they didn't need the cash, then why did they start a sale of stock on Oct, of 2010.
    And it was ongoing at the time of the IPO.

    """As of March 1, 2011, 6,374,900 common shares had been sold under the controlled equity offering with net proceeds to us amounting to $21.6 million."""

    Again, it's my assertion that they diluted PRGN shareholders in order to give TEU that loan. And since Paragon was paying some of it's creditors Libor plus 2.75%, it wasn't worth the "investment".

    In March just before the IPO, one of their charterers, Korea lines announced they would default on payments for one of the chartered ships. Korea Lines also was a charterer of other of their ships.
    That would have sent up a red flag, that maybe, you might just need the money after all.
    By Dec, 2011, Paragon was in breach of security cover ratios, and also the liquidity requirements with RBS.
    And yes, I think they should have seen that coming.

    As to the future, there are 800 ships on order for 2015. And specifically to the new Ultramaxs they have ordered. There are 743 Supramax and Ultramax on order over the next three years.
    I wouldn't say the matter of continued oversupply is a matter of "if". But a certainty.
    I'm done, good night, and good luck in your investments.
    Jul 2 09:57 PM | Likes Like |Link to Comment
  • Paragon Shipping: Following Up With CEO Michael Bodouroglou [View article]

    Mikes most recent purchase was Dec, 2012 when he paid $10 million for 4.9 million shares.
    It was a great move.
    He has also received many shares over the years as part of compensation.
    As well as the ones awarded to Loretto.
    Jul 2 07:35 PM | Likes Like |Link to Comment
  • Paragon Shipping: Following Up With CEO Michael Bodouroglou [View article]

    Mike's answer that TEU could not take the containerships and their continued expenses, and their additional debt, off the hands of Paragon shareholders hands, because TEU could not afford it, is absurd.
    Obviously, PRGN couldn't afford it either.
    And they couldn't afford to give anyone a loan.
    As evidenced by the continued dilution, and continued decline in the value of it's fleet. And the continued breaches in loan covenants, the result of being overstretched.
    The new containers on order declined in value more than the aforementioned Kamsars that were cancelled.
    The answer that TEU wouldn't have been able to pay a dividend if it had taken the ships is of little comfort to PRGN shareholders.
    It's quite obvious that TEU was handles in a shareholder friendly way, at the expense of PRGN shareholders.

    """"This question is another example of how easy it is for people to be disoriented if they do not follow up the story from beginning to end."""

    Yeah, Mike, I have followed you and your company from beginning to end.
    I'm not disoriented, I know which companies and their CEO's handled the crisis better than you did. I'm just trying to decide if your decisions were the result of incompetence, or self serving.

    So, let's do a review of Mike's management performance over the years. I think it's fair. I don't care if he's a nice guy. This is money. It's serious.
    Who doesn't want to look at that before investing in a stock?
    The venture into container ships was horrible.
    The very poor decision to buy the Handies and Kamsars in 2010, while ship values and charter rates were declining, and when the order book for dry bulk ships was set to double the size of the fleet. After deciding that the Kamsars were the wrong choice, they went from bad to worse, by changing that order to containers.
    And they decided to convert them one month before the IPO of TEU.
    They should have known by then that TEU couldn't afford them. They definitely knew that PRGN was going to have to pay off debt to be in compliance with loan covenants.

    Rates continued to fall, as well as ship values, not a good time to order ships, when you have declining revenue, and loan issues.
    Management at DSX was warning that things were going to get worse, so were shipbrokers. Why didn't you know?

    Last Fall and Winter, DSX took advantage of the increased rates to sign one and two year period charters for some of their Panamax, in the range of $12,000 per day.
    Not great, but profitable for a company with low debt expense.
    Mike, you insisted that PRGN keep their Panamax ships on spot, despite Panamax being the most oversupplied ship class on the market.
    The first half of 2014 has been horrible for Panamax spot.
    Rates are below $4,000 per day.
    It will take a monumental rally in rates for those ships to average a break even TCE for the year.
    FFA's for the 4th quarter are at $12,000.
    Again, a bad decision.
    If you want to wait until year end to make that judgement, be my guest.
    That would be hindsight.
    Jul 2 07:31 PM | 1 Like Like |Link to Comment
  • Paragon Shipping: Following Up With CEO Michael Bodouroglou [View article]
    First of all, the author has been very civil to all, including the dissenting posters, and to the CEO who he obviously admires.
    And I have been less civil, I find it entirely appropriate to hold the managements feet to the fire. They should have a thick skin. Especially if they have made as many mistakes as the dry bulk CEO's have.
    I have never judged them on being "Greek".
    I've been reading every bit of possible information on all the dry bulk stocks on a daily basis, since 2006.
    And I expect the CEO's to know more than I do. So some of their moves have not left me wondering why, but instead to look at whether the move was made to benefit the shareholders, or the private companies owned by the CEO.
    I feel as though what I'm doing is giving a fair analysis based on years of research, not sour grapes, or any kind of vendetta. I'm a short term trader, and these stocks are great for that. But I also think I can offer information, not advice to those that have a longer investment horizon.
    My posting history on SA dates to 2008, and it is almost exclusively about dry bulk. I made money on the rise in the BDI in 2006-2007, including after the IPO of PRGN. Which I sold soon after.
    But, I am not a "bitter bagholder", nor a disgruntled shareholder. I continue to trade dry bulk stocks, and post about them, because that is what I know.
    I've been criticizing PRGN and Bodouroglou since Sept, 2009.
    Including the venture into box ships right after the IPO. And the loss of $14.8 million for selling the first two Container ships to TEU.
    So I wouldn't call that hindsight.
    However, prospective shareholders have a right to use hindsight when deciding which of these dry bulk stocks to invest in. I's part of DD. No apologies to the CEO are necessary for calling him out for his decisions, especially when they have resulted in such dilution, and destruction of shareholder value.
    Before you say it was a result of an unforeseen, and unavoidable circumstance, you need to do a peer comparison. After all, you are making a case for PRGN to be the choice amongst many comeback companies in this sector.

    As to Mikes answers:
    Speaking about Lorretto and Allseas in the third person doesn't distract from the fact that both companies are you Mike, The question for many companies whose shareholders have been losing all their money, is why is management still getting paid huge amounts while the stock tanks. Lorretto is you Mike, why do you need to have a consulting company owned by you, to advise you, the cEO on matters pertaining to financial arrangements? Why, on top of a commission for each and every financial transaction, does Lorretto need to be awarded shares for free? Your shareholders get diluted.
    Mike's answer, that all the other shipping companies do it, is not good enough.

    Mike's answer that """Incentive plans such as these align the interests of Allseas executives to where we need them, and drive the performance of the staff.""
    That's really not a good answer to a complaint that your compensation is excessive.
    We know it's compensation, we know it's incentive. Does Allen Mullally need a consulting firm owned by him to advise himself on financial matters?
    What exactly are the duties of the CEO of PRGN?
    How often did Allseas visit the shipyard building it's ships, that they deserve such a percentage of their cost?

    Saying that PRGN did not order the containerships, but that it was a "conversion" of an order for Kamsars. Is semantics. I'd call it something else, but.....

    No, the loan to TEU did not cause Paragon to be in breach of loan covenants. But a breach of a security cover ratio, is remedied by cash, cash to pay down debt so that the assets are valued at 130% of the debt. PRGN didn't have the cash, they loaned it to TEU. So PRGN shareholders were diluted once again. Great for TEU, not fair to PRGN shareholders.
    Jul 2 06:38 PM | 1 Like Like |Link to Comment
  • DryShips And Affirmation Of My Bullish Drybulk Outlook [View article]

    "Also remember that in the anticipated coming fall cycle upswing, many of the capsize contracts will be starting to expire and the company will be heading strongly into the spot market."

    I know what the charter contract situation is.
    The Raiatea can be returned from the charterer, any time between May, 2014 and Jan, 2015. it is chartered for $26,000 per day, if the charterer can't get a better rate than that, either on the spot, or period market, then the charterer will not return the ship until it has to, in 2015. Just as rates rise in the 3th quarter each year, they also suck in January of each year.
    The Robusto, Cohiba, and Montecristo, all have earliest redelivery this year, but the charterer is not obligated to return them for a long, long, time.
    And, there is nothing to say that there will be an appreciable increase in revenue above $26,000 per day. Last year there were a few Cape charters that reached over $40,000 per day but not all and not for long, the depressed Cape rates in the 1st quarter 2015 will wipe that out. And last year a record low level of inventory of iron ore at the Chinese ports led to the rapid rise in spot rates, this year, even though demand should be high, the inventories are also very high. So don't expect the same reaction.
    There is only one Cape, the Partagas, that is coming due, and is also going to get a nice raise in charter rates. That is the Partagas, which is earning $11,500.
    Everyone that saw the rise in the BDI last Fall thought that DRYS was going to be rolling in dough. Didn't work out that way.
    The $15 million quarterly dividend from ORIG will make up for the putrid Panamax spot rates.
    It's a good trade, just don't hold on too long.
    Jun 30 07:18 PM | 2 Likes Like |Link to Comment
  • DryShips And Affirmation Of My Bullish Drybulk Outlook [View article]

    ""Year to date, all of the dry shipping stocks have been clobbered. Ocean Rig has seen the least of the damage, off 1.51% for the year. DryShips has been mauled to the tune of 31.5%."""

    Why are you including the price action in ORIG in a discussion of dry bulk?
    Just because DRYS owns 59% of ORIG does not make ORIG part of the dry bulk sector. And ORIG doesn't trade off of the fluctuations in DRYS stock. The only time DRYS has any influence on the price of ORIG is when DRYS sells some of the shares it owns of ORIG.
    The uninitiated don't seem to understand it is not a dilutive event.
    ORIG trades based on the prospects of the Deep Water Drillers, as it should.
    It is absurd to lump them and their stock performance in with the seasonal action in the dry bulk sector or the BDI.
    Everybody knows about the seasonal moves in the BDI, few seem to realize that when Cape rates triple for just a few months, it will have minimal effect on DRYS revenue. and if Panamax rates triple, DRYS will still be losing money on a GAAP basis.
    But it is a good trade.
    Jun 30 05:49 PM | 1 Like Like |Link to Comment
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