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ramisle

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  • Baltic Trading Limited: A Quick Double If Shipping Rates Cooperate [View article]
    I wouldn't use a 10year model. The iron ore prices used to be a one year contract, negotiated every spring up until 2007.
    Then the miners forced the change to a spot based system. That is when the game changed, and the winter stocking became more important than the end of the yearly price negotiations.

    December 8, 2009, the BDI peaks at 3902.
    Feb 2, 2010, it falls to 2691.

    December 7 , 2010, BDI peaks at 2100.
    By Feb 8 2011, it fell to 1064.

    Oct 18, 2011, it peaked at 2136.
    Feb 6, 2012 it dropped to 647.

    Oct 26, 2012 BDI was1049
    Feb 15, 2013 BDI was 750.

    Some of the BDI numbers are not as pronounced as the drop in Cape rates each year. For example Cape rates rose to $16, 842 in Oct, 2012. And then dropped below $5,000 per day a month later.
    Cape rates were in a range between $5,000 to $7,000 all spring right up until the restocking started in July, 2013.

    It is the Cape rates in your estimate, both high and medium, which add the most significant upside.
    It's the Cape rates that have carried the BDI to such a lofty level this past fall.
    And it is the Cape rates which will drop soon that will make the BDI plummet, because they are so inflated compared to the other rates.

    BALT is a good choice among these companies, but it's a bad time to get in.
    Jan 2, 2014. 09:58 PM | 1 Like Like |Link to Comment
  • Baltic Trading Limited: A Quick Double If Shipping Rates Cooperate [View article]
    ""There has been a high degree of "slippage" in newbuilding vessel deliveries as shippers have had to cut back as a result of financial difficulties.""

    Slippage refers to the delay or deferral of deliveries from one year to the next.
    Of the 813 ships that were on order to be delivered this year, 65 were delayed.
    To be completed in 2014.
    That increases 2014 orders to 852. And 550 for 2015.
    More dry bulk ships were ordered in 2013, than in 2012, and 2011 combined. The boys are at it again.
    The Australian miners can talk about ramping up production by 50%, but if the demand for steel is only up by 5%, then all that extra production won't be shipped.
    Imports of iron ore into China were up 10% this year, steel demand was sluggish. So the inventories of iron ore at the ports grew from 65 million tons in May, to 88 million tons in December, not including the dozens of Capes in transit, and waiting to be unloaded.
    Peak inventory is 101 million tons.

    BALT is a nice pick, given their exposure to the spot rates.
    But, it is likely that they haven't risen as much as some of the other companies due to the fact that GNK owns all their Class B shares.
    GNK is on every analyst list of most likely to go bankrupt.
    Jan 2, 2014. 09:15 PM | 1 Like Like |Link to Comment
  • Baltic Trading Limited: A Quick Double If Shipping Rates Cooperate [View article]

    You did all that earnings estimates based on what the rates were on Dec 24, 2013.
    Are you aware of the volatility of the BDI?
    The anual restocking of iron ore and coal into China before winter, before the Chinese New Year?
    Have you seen what happens to freight rates in the first half of the year?
    You're about to find out.
    Jan 2, 2014. 08:29 PM | Likes Like |Link to Comment
  • A Few Reasons Why I Am Bullish On Diana Shipping [View article]
    I wouldn't use their entire fleets, when the article is about Dry Bulk.
    Those are the dry bulk ships that those companies control, no containers, no tankers, no LNG. It does include the "chartered-in" fleets.
    There are currently over 9,000 dry bulk ships in the water, representing over 700 million dwt.
    And thousands of companies.
    The author is suggesting that DSX has some advantage due to economies of scale.
    DSX is a fine company that has handled the downturn better than most of the US listed companies.
    I'm sure that customers would rather deal with Palios than Economou.
    But as far as size, they have no advantage.
    DSX is paid the going rate for a ship of similar size, condition, and age.
    The entire Navios bulker fleet (NM,NMM) controlled by Angeliki is much larger than Diana.
    Jan 2, 2014. 02:30 PM | 1 Like Like |Link to Comment
  • A Few Reasons Why I Am Bullish On Diana Shipping [View article]

    Those are not the biggest "competitors" for Diana.
    COSCO controls 372 dry bulk ships.
    NYK controls 232.
    Mitsui OSK controls 156.
    And dozens of other companies that own over 50 ships.

    DSX is a great choice, is very healthy, and well managed.
    But as far as value. Shippers, due to being cyclical, carry a PE of 7-9.
    And it will be awhile before DSX has projected earnings to warrant the current stock price.
    They have picked up some nice period Cape charters recently of around $20,000 per day. But period charters for Panamax are not impressive.
    The euphoria over the high BDI in the last few months, is not reflected in the one and two year period rates.
    Those that think the BDI is going to just keep climbing like last year, will be sobering up here over the next few months.
    Simeon Palios, of Diana has been one of the few CEO's to be honest, and sober, when giving an outlook for a modest improvement in rates for 2014. He is aware that new ships keep coming, and when rates are profitable scrapping will slow.
    And, the demand for finished steel is not supportive of the increased shipments of iron ore for the second half of 2013.
    Jan 2, 2014. 09:38 AM | 3 Likes Like |Link to Comment
  • DryShips Shares Are A Better Value Than Its Drybulk Peers [View article]
    TEU has 6 of it's 9 ships coming off charters in the next nine months.
    The charter rate environment is horrible for the small containerships right now, and it's not getting better anytime soon.
    The reason they have been profitable, is because when they bought the ships, it was a sale leaseback deal. TEU paid a higher price for the ships in return for a lucrative long charter.
    When those charters for $23,000 to $28,000 per day expire in a few months, and are replaced by charters for $8,000 per day, then they will no longer be profitable.
    Don't take my word for it, look up the latest charters for ships of that size.
    Dec 30, 2013. 08:21 AM | 1 Like Like |Link to Comment
  • DryShips Shares Are A Better Value Than Its Drybulk Peers [View article]

    Well, ESEA is mostly exposed to the containership sector.
    The really small, really old containerships sector. Which is oversupplied. And their charter rates are well below break even.
    As for assets, except for a couple of ships that are less than 15 years old, most are too close to 20 years old, meaning they should be valued as scrap.
    Their book value is overstated, the market value is much less.
    Other small container owners like DCIX are scrapping older, smaller ships rather than charter them out at a loss.
    It's too bad, in the recent past, a 20 year old containership was not considered ready for the scrap heap.
    But with the massive build out of huge containerships, fewer feeder ships will be kept in service.
    The big Liner companies like Maersk, have changed the game. And they've decided that bigger is best, and Maersk has decided not to use the Panama Canal. Ports around the world are upgrading their cranes to handle the wider ship, the small ships will be used for north/south traffic.
    Dec 29, 2013. 08:42 PM | 2 Likes Like |Link to Comment
  • DryShips Shares Are A Better Value Than Its Drybulk Peers [View article]

    ""The company has estimated that if spot rates rise by $5,000, it will add $65.8 mill. and $79.3 mill. to its EBITDA or free cash flow generation, respectively, and the numbers rise even higher to $131.6 mill. and $158.7 mill. respectively if spot rates rise by $10,000, and to $263.2 mill. and $317.3 mill. if spot rates rise by $20,000."""

    Yes, and if I can sell my old boat for $2 million, then I can retire comfortably in Costa Rica.

    You rely too much on PR's from George.
    The FFA's, (rate futures) suggest that the average rate for Panamax will be between $11,000 per day, and $14,000 per day, for the next five years.
    That would be the yearly average.
    Not just the rates between Sept, and December, when iron ore, and coal, is restocked into China before winter. Add to that a bumper crop of grains, and you have everyone with a short memory jumping into dry bulk stocks.
    The demand for finished steel has not increased along with the iron ore imports. The iron ore is going into inventory.
    The FFA's are used by ship owners, and brokers, and the Pros who trade commodities, as a hedge. They all seem to think that
    Panamax rates will be marginally profitable for awhile.
    There has been around 750 dry bulk ships launched this year, and another 730 are ordered for next year.
    And this year, shipowners and private equity, has ordered more ships to be delivered over the next three years, than were ordered in 2011.
    So,the glut will continue.
    Dec 29, 2013. 05:57 PM | 2 Likes Like |Link to Comment
  • 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 01:40 PM | Likes Like |Link to Comment
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