glenwpeterson

Are Shipping Stocks Sinking?

You can't simply lump all these companies together and paint them over with a broad brush....

USS is a shuttle tanker company that's had it's problems for years....

Eagle is a dry bulk shipper with long term contracts and the potential to increase the divy next year to an exit rate of $2.50 according to the Jeffries analyst who has been spot on in this sector.

ONAV is a pure play product tanker company with three year committments and 100% booked through 2008 and 63% booked through 2009.....It's got more ships coming on-line and solid charterer committments.

SFL isn't really a tanker company, it's like a tanker finance company that buys the assets and leases them back. SFL has very long term committments and the ability to organically grow at 10% per year, whilst paying down debt and increasing it's cash flow. It's branching out after complete divestiture from Frontline and is getting into financing FPSO's and Bulk Tankers.

Not a big fan of spot market oil tankers like FRO, NAT, et. al., but we're coming into the strong quarters and the history of FRO has been nothing but phenomenal with respect to creating shareholder value.
And the long term growth in oil requirements from the developing world will increase ton miles and by 2010, we should be back to a pretty tight market as single hulls get completely phased out due to international maritime regulations.

Frankly, I don't think the author has done a lot of research on any of these companies.

GWP