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ramisle

ramisle
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  • DryShips Shares Are A Better Value Than Its Drybulk Peers [View article]

    """DryShips survived the tumultuous times by diluting shareholders, with its shares outstanding having gone up from 36 mill. shares in 2007 to 211 mill. shares in 2009, and 376 mill. shares in 2011. However, that pace has slowed down quite a bit as the company is ending 2013 with shares outstanding at 383 mill. shares, only 2% higher from the levels two years ago."""


    Yes, after the spin off of ORIG, they were still not able to pay the bills, so instead of diluting the DRYS shares, they instead started to sell off it's shares of ORIG.
    They sold off 20 million of those shares over the last 2 years using the money to stay afloat, and to pay other people to take ships off their hands that DRYS couldn't pay for.
    And the SEC filings have the shares outstanding at 427 million shares.
    In case you want to suggest that DRYS was making the best of a bad situation, you should look harder at the moves made by Diana over the last five years.
    That's how you handle trying times.
    Dec 29 05:35 PM | 1 Like Like |Link to Comment
  • DryShips Shares Are A Better Value Than Its Drybulk Peers [View article]


    """DryShips shares trade at an attractive 17x FY 2014 and 8x FY 2015 earnings. Also, based on the current $487.4 mill. in EBITDA on a trailing twelve month (TTM) basis, its shares trades at a 13.1 EV/ EBITDA ratio"""


    Seriously.
    When are these authors going to stop using the consolidated EBITDA of both ORIG and DRYS, and form a ratio that only uses the share price of DRYS.
    If you can't be bothered to strip out the DRYS revenue, and earnings, from the combined, then you are falsifying data.
    These are two different companies, DRYS has no access to the revenue or earnings from ORIG. DRYS owns 78 million shares of ORIG, it is an asset, period.
    There could be a distribution if, and when, ORIG forms a MLP.

    But you can't compare DRYS to Navios using those numbers, unless you want to combine all the revenue from Navios Holdings, NMM, NNA, and NSALI. Which you didn't.
    Dec 29 01:13 PM | 4 Likes Like |Link to Comment
  • 3 Reasons Why DryShips Is A Sell [View article]

    There have been several bullish, and a couple of bearish articles about DRYS over the last few years.
    Either way, if you are going to hash out the financial data, you could at least separate the DRYS data from the consolidated DRYS/ORIG data.
    You at least mentioned that DRYS does not have access to ORIG revenue and earnings, that's important. But then you should just use the $1.7 billion in debt that belongs to the shipping segment, the rest of the debt belongs to ORIG, and only ORIG.

    The 78 million shares of ORIG they own is an asset, with a fluctuating value.
    The $6 billion backlog that everyone loves to talk about, is good because it provides some visibility that the rigs will continue to be employed for years. They represent future contracts, and while the forward visibility is considered a plus, you have absolutely no idea how much that figure represents in profits. Because ORIG has had lucrative contracts for the last two years, and it hasn't always yielded great earnings. ORIG could very well trade in the same range it has been in. And George may continue to sell more of that asset, and waste the proceeds.
    The shipping segment has a backlog too, anyone mention that?
    No because DRYS is losing money. despite those contracts.

    The spot rates for Panamax are not as impressive as the rise in the BDI as a whole. Anyone who isn't ready for those rates to drop in the first quarter, hasn't been paying attention.
    And, you should pay close attention to how he handles the IPO, when ORIG is converted to a MLP.
    That's where George has been known to *#@%* on shareholders heads, and tell them it's raining.
    Dec 24 11:56 AM | 1 Like Like |Link to Comment
  • Iron Ore Shipments Will Continue To Drive Dry Bulk Success [View article]
    """Their exposure to the spot market during 2014 and 2015 will increase their profitability over what they would have if they maintained the fleet on contract."""

    Seriously??
    You have absolutely no clue what spot rates will be next month.
    And yet you think you can claim that spot rates will be higher in 2014- 2015, than if they took some of the available Cape period, 2 year charters for $20,000?
    There are another 1600 ships on the order book, to be delivered over the next three years, and climbing.
    Amazing how the pumpers come out of the closet every time the BDI has a seasonal rally.

    The miners can ramp up production all they want, but if there isn't a reciprocal increase in demand for steel, then the extra iron ore won't be shipped.

    ""China's crude steel consumption for 2013 is estimated at 693 million tonnes and it is expected to grow 3.2 percent year on year to reach 715 million tonnes in 2014, an industry expert said on Friday.

    Given China's current production capacity, the debt-laden steel industry will continue to struggle with overcapacity, said Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute.

    China is the world's biggest steel consumer and producer. In the last several years, China's iron and steel sector has been pummeled by weak demand and falling prices and suffered greatly from overcapacity."""
    Dec 22 09:55 PM | Likes Like |Link to Comment
  • DryShips: Slowly Sailing Ahead [View article]

    Definitely, I've owned it many times over the years.
    But usually just short term, because of the many unpleasant surprises.
    DRYS has always been the poster boy for the dry bulk stocks, but many of the others have delivered more bang for the buck over the last year.
    Good luck.
    Dec 22 05:08 PM | 1 Like Like |Link to Comment
  • DryShips: Slowly Sailing Ahead [View article]
    Those are the numbers for Steel Demand in China.
    But they produced far more than that, and only 10% of their production is exported. That leaves some serious overcapacity, and inventories.

    """"Zhang Changfu, secretary-general of the China Iron and Steel Association, said total crude steel output was likely to end this year at 782 million tonnes, up 9 percent from 2012, according to a report by the official Xinhua news agency.

    Total output over the first 11 months of the year hit 712.8 million tonnes, up 7.8 percent on the year, China's iron ore imports rose 10.9 percent over the same period to reach 746.1 million tonnes.

    The government issued policies in October to try to rein in its bloated steel industry, vowing to bring market discipline and tougher technological and environmental standards to a sector cosseted by years of soft loans and local government protectionism."""
    Dec 22 01:54 PM | Likes Like |Link to Comment
  • DryShips: Slowly Sailing Ahead [View article]

    People forget that in the Spring of 2012, Cape rates fell to less than $4,000 per day, as inventories are allowed to fall.
    And again in Spring of 2013, Cape rates fell to $6,000 per day.
    That's why, when the restocking begins, rates jump so much, but it certainly doesn't mean the actual demand for iron ore has risen dramatically for the year.
    Iron ore demand depends on steel demand in China.
    And this is what they say about that in China:

    ""China's crude steel consumption for 2013 is estimated at 693 million tonnes and it is expected to grow 3.2 percent year on year to reach 715 million tonnes in 2014, an industry expert said on Friday.

    Given China's current production capacity, the debt-laden steel industry will continue to struggle with overcapacity, said Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute.

    China is the world's biggest steel consumer and producer. In the last several years, China's iron and steel sector has been pummeled by weak demand and falling prices and suffered greatly from overcapacity."""
    Dec 22 01:40 PM | Likes Like |Link to Comment
  • DryShips: Slowly Sailing Ahead [View article]
    Thanks Kurt,
    Yes I think there will be some improvement in the dry bulk sector.
    And who knows how high the stock prices will go before an actual earnings report comes out.
    The trend of ships accepting charters for half their daily OPEX should be over, but people are getting giddy over an unsustainable, seasonal, rally in spot rates.
    I think there has been too much optimism about the single most detrimental thing facing companies trying to make a profit.
    There is, and will remain to be, an oversupply of ships out there. There have been reports that the growth of the fleet will be matched by the growth in demand for products shipped next year. That is based on estimates for healthy growth from China, while other reports say that their steel demand will be reduced. They also base those estimates on scrapping remaining at high levels, but when rates are profitable, shipowners don't scrap old ships, they charter them out, you'll see that when they report demolition numbers for the second half. Especially since now, 80% of the fleet is younger than 15 years old, and 50% of the fleet is younger than 5 years old. There aren't that many rust buckets left to scrap, and most of those are very small Handysize.
    The order book dropped to 1400 ships at the end of last year. So far, this year, 750 ships have been delivered, another 750 are on order for next year. And the order book has grown to 1600 ships.

    As far as DRYS specifically, they have not reduced their debt, beyond the payments that were demanded by their banks, to come under compliance. They used shares of ORIG to increase their collateral, because they didn't want to raise cash by selling shares. They made a deal with banks to use restricted cash to make payments, and other principle payments were pushed off a couple years. Those are all Band Aids on a bad situation.
    It's amazing how many people find those moves encouraging, more like desperation. But the bar has been lowered for them to "At least they won't go bankrupt!!".
    If DRYS sold off enough ORIG shares to get their debt under control then they would be in good shape, but instead they have sold off enough to pay the bills.
    DRYS had $31 million in interest and finance costs last quarter, that's just DRYS shipping, not the consolidated with ORIG. So, a quarterly distribution from an expected ORIG MLP would be $25 million, with $15 million going to DRYS. That still leaves them with burdensome debt, and interest payments. And as I stated, the new normal for freight rates should be profitable but not rolling in dough, like some people think.
    The better companies reduced debt, and picked up new ships at bargain prices to grow revenue and earnings. DRYS not only didn't reduce debt, but they paid people to take ships off their hands. In fact, they sold, at a loss, two VLOC's and two Suezmax, last year, and this year those ships are the ones that are getting the highest rates. HMMMM, who did George sell those ships to?
    Himself.
    Dec 22 01:11 PM | Likes Like |Link to Comment
  • DryShips: Slowly Sailing Ahead [View article]

    Every year, following a seasonal rise in the BDI.
    Someone writes a bullish article, telling people to buy dry bulk stocks, just before the BDI is about to crash.

    Imports of iron ore into China reached a record in November.
    Just as steel production reached a yearly low.
    Due to an oversupply of finished steel products, and slack demand.

    Happens every year. In Winter steel demand drops, add that to the Chinese New Year on January 31. And you get plummeting rates.
    FFA's estimate Cape Spot rates to be $15,000 per day in first quarter 2014.
    Panamax rates (where DRYS is on spot), are projected to be $13,000. Break even is $11,300.

    GNK and EGLE are on every shipping analysts list of most likely to go bankrupt this year.
    Dec 21 06:42 PM | 1 Like Like |Link to Comment
  • 3 Hot Shipping Stocks For 2014--And 2 To Avoid [View article]
    Common shareholders of EGLE will be wiped out in 2014.
    Even your wildest dreams of Supramax rates aren't enough to get them out of the hole they are in.
    Dec 19 04:12 PM | Likes Like |Link to Comment
  • 3 Hot Shipping Stocks For 2014--And 2 To Avoid [View article]

    NM is not a dry bulk pure play.
    They own NNA and NSALI.

    And they aren't selling off their subsidiary in order to pay the bills, like DRYS is.
    DRYS is already using shares of ORIG as collateral for their loans because of breach of collateral maintenance ratios.
    DRYS most likely suspended it's share offering in anticipation of the failure of their shipyard to deliver the Ice-Class Panamax on time. That will cancel that contract, the deposits will be returned to DRYS, and reduces the expected Capex for 2014.
    Other than the expected upcoming dividend from ORIG, they get no revenue or earnings from ORIG, and you shouldn't count that money too soon, DRYS is notoriously late in delivering on promises.

    And the book value of these companies is useless. It is based on the purchase price of the ships minus accumulated depreciation, and is not close to the actual market value of their assets. (Ships).
    Dec 19 03:14 PM | 2 Likes Like |Link to Comment
  • Paragon Shipping: Improving Fundamentals And Exemplary Leadership Point To Significant Upside [View article]

    Yeah, by all means, I'm not recommending a buy of either company at this level. I expect the BDI to fall for the first quarter.

    And it will be awhile before their earnings deserve a multiple that fairly reflects the current stock prices.
    Good luck.
    Dec 16 10:58 AM | 1 Like Like |Link to Comment
  • Paragon Shipping: Improving Fundamentals And Exemplary Leadership Point To Significant Upside [View article]
    Well, I know my comments may seem to be "Monday morning quarterbacking", but when picking stocks, it is entirely fair to look at how management has handled business in the past.
    For those that think the unfortunate circumstances of the last five years didn't leave Bodouroglou many choices, I give you Diana Shipping as an example of how it should have been done.
    They suspended their dividend in 2008, warned investors that dry shippers were about to face massive oversupply, signed their ships up for lengthy profitable charters, and prepared themselves for the challenge of lousy rates ahead. Diana stayed profitable right up until this year, when the legacy charters finally came to an end.
    And Diana always built their fleet with less debt than the big spenders, they sold shares when their price was high, which is why they had a nice cushion of around $400 million in cash when the other companies were getting in trouble with their lenders, and selling shares for $2.
    Diana had minimal dilution, and they did it to buy more ships at attractive prices. They weren't one of the companies selling shares to pay the bills. Diana has added ten ships as prices fell.
    Navios also did a better job of managing the crisis.
    I think Bodouroglou did have a choice in this crisis, and his choices were not favorable to shareholders.

    I think it is very fair to compare similar companies, and how they handle the same crisis.
    And I find this statement:
    ""We managed our cash, and our assets, most effectively. We were brave, and self-assured, when others were afraid.""

    To be false. And hardly humble.
    Dec 16 07:51 AM | 2 Likes Like |Link to Comment
  • Paragon Shipping: Improving Fundamentals And Exemplary Leadership Point To Significant Upside [View article]
    "Would it have been preferred that they took a loss of 23 million and gave up both ships cold?"

    Whether or not it is the right thing to do now is not my question.

    But, why are PRGN shareholders the ones to be taking this loss?
    The ships were ordered in March 2011.
    TEU was spun off in April 2011.
    TEU should have been paying the fees. They should have taken the loss. They will be sold to TEU anyway.
    Are you unaware that PRGN is not allowed to own and operate the containerships?
    Why wasn't this handed over in 2011?


    ""As for his role in other entities, whether it be AllSeas, Innovation, Loretto, or Box Ships"""

    Just as a common sense, shareholder interest, aren't you the least suspicious of why a CEO has all his duties outsourced to private companies owned by him?
    Can you imagine if Alan Mulally bought a building for himself, only to turn around and sell it to Ford for a profit? All the while he was subcontracting the windshield purchases through a company he owned. And by the way the accounting for the company was done by an outside company he owned?

    PRGN is a very small company, there are no economies of scale by having Allseas manage the ships, and several other larger and smaller companies do it "In house".
    None of your scenarios warrant the giving of 2% of the outstanding stock to Loretto for no compensation. It's a non dilution clause, and even Economou doesn't try that one.
    Dec 15 10:14 PM | 1 Like Like |Link to Comment
  • Paragon Shipping: Improving Fundamentals And Exemplary Leadership Point To Significant Upside [View article]
    Korea Lines and Deiulemar went bankrupt.
    I would say that should remove them from "top tier" status.

    Dec 15 09:55 PM | 1 Like Like |Link to Comment
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