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IBDvalueinvestin (98.63)

3 months prior to August. is time to buy Drybulk, here is the reasons



May 15, 2009 – Comments (7) | RELATED TICKERS: TBSI.DL , DSX , GNK

Companies order goods from China and other Asian nations 3 months ahead of August for back to school goods and it takes roughly 3 months to get the order processed and delivered on time for August delivery. Guess what time it is right now? 3 months ahead for August delivery and guess which stocks are rallying today? GNK, SB, EXM, DRYS, TBSI, DSX

I doubt it very much that these stocks will go to previous highs of $50, $75, $115 but they can go to $20, $25, $30 which is still pretty hefty gains from current prices.

7 Comments – Post Your Own

#1) On May 15, 2009 at 10:08 AM, IBDvalueinvestin (98.63) wrote:

Plus other Drybulk goods are rallying, Fertilizer & Coal. These 3 items go hand in hand with Drybulk rates. When demand for these shows signs of life Drybulk rates start moving up fast.

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#2) On May 15, 2009 at 10:18 AM, soycapital (< 20) wrote:

Which dry bulk company looks good to you? I have some EXM that has been doing well. Over 150% Thanks.......

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#3) On May 15, 2009 at 10:24 AM, IBDvalueinvestin (98.63) wrote:

GNK is the best of the best, but a sleeper could be DRYS which got pummeled on bad news from the teens to single digits. Today's news shows the bad news is behind it, It could rally to $15 within days if this rally in drybulks heats up as much as what they carry has heated up mainly COAL & Fertilizer,.

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#4) On May 15, 2009 at 11:55 AM, XMFSinchiruna (26.51) wrote:

It's time to steer clear of dry bulk. Your investment thesis is based upon demand from back-to-school goods? Good luck!!!

DryShips Signals Sector's Weakness

Eagle Remains at Full Steam Ahead

Darwin and Diana are Adorable Newlyweds

DryShips vs. Moby Debt

Your CAPS name suggests a penchant for value investing... given the debt, dilution, and heavily impaired market metrics, how do you define value with respect to DRYS? These stocks could exhibit more of the same for many months: excruciating volatility with no clear trend direction until some start falling prey to bankruptcy. I have voiced my cautionary tale, so what Fools decide is up to each individual... but I urge serious caution.




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#5) On May 15, 2009 at 11:59 AM, EggplantWizard (78.70) wrote:

Have to agree with Sinch here.

The only two shippers that I think will survive with near 100% certainty are DSX and NM. The whole sector is in trouble.

That could make for some "value" -- but it's speculative value, not Ben Graham style value.

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#6) On May 15, 2009 at 12:00 PM, IBDvalueinvestin (98.63) wrote:

TMF its more on CHINA , back to school is just an added benefit.

China buying boosts Baltic index

Created:13 May 2009Written by:Julian Hofmann

The volatility of the Baltic Dry Index (BDI) has been well documented this year, but a 400 point surge over the past month has pushed the index back to the levels it enjoyed just before the boom in shipping started three years ago.

February to April saw the largest ever amount of iron imported by China, including more than 50 million tonnes in April alone. That has largely fuelled the rise in the BDI, with shippers reporting brisk activity on the Australia to China route. Chinese buying activity and evidence of large-scale restocking, is fuelled by a spot ore price that is at its lowest in four years: the latest CIF (cost, insurance and freight) price for iron ore is $80 per tonne, down 40 per cent compared with last year. According to Brazilian iron-ore producer Vale, contracts with medium-sized steel mills, presumably state-owned, were the driving force behind the pick-up in sales in the quarter.

The latest data from N. Cotzias Shipping shows that the spot rates for the key Capesize index were now running between $14,000 and $42,000 per day for the largest vessels, a significant improvement on the below-running-cost prices seen just before Christmas. This has also led to increased activity in the sale & purchase market, although at far lower levels. Cotzias cites the case of the M/V SWS Resale, which was recently bought by Greek ship owners for $63m, a 58 per cent discount to its sale price only a year ago. Cotzias's findings are bourne out by the UK's major shipbrokers, Clarksons and Braemar, which this week both reported renewed interest in ship buying.


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#7) On May 18, 2009 at 3:41 PM, XMFSinchiruna (26.51) wrote:

IBD... I have placed that Chinese buying in context for you, and incorporated that into my fundamental analysis on the sector. I am baffled by the bullishness of your interpretation.

You need to spend some time with some of my articles on the sector. :)

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