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kaskoosek (99.78)

What do you think about this tanker stock?

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June 18, 2009 – Comments (11) | RELATED TICKERS: VLCCF

I usually take good ideas from top fools.

This time it is from Anticrade regarding this shipper. VLCCF

 

Eventhough I am a bit afraid to put real money on this one, I still think it is a pretty good investment.

 

The ratios.

P/B =  1.09

 

Real good, eventhough it is higher than other companies in this sector, nevertheless it means that the stock is not overpriced. Lower risk compared to other in the sector means higher premium.

 

Interest Coverage 26.80

Great, no need to get into too much detail, eventhough these are bubbly 08 levels.

 

Earnings in 2008 were inflated, so I do not think we will return to these level. I will compare to 2005 earnings.

Earnings 2005 43.97

market cap 2009 243 mil

That is an earnings yeild of 20%. Not bad here.

 

Now onto the balance sheet

Cash and Equivalent 78 mil

Short term debt 42 mil

Debt looks easily managble.

 

 

 

 

 

11 Comments – Post Your Own

#1) On June 18, 2009 at 5:56 AM, kaskoosek (99.78) wrote:

After doing a bit more research, I think I am going with Euroseas ltd.

 

Much cheaper.

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#2) On June 18, 2009 at 6:34 AM, Seano67 (< 20) wrote:

Are you looking to add an oil tanker, a dry bulk, or does it matter? Have you looked at TNK?

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#3) On June 18, 2009 at 7:08 AM, bullishbabo (100.00) wrote:

I like your choice! ESEA is my favorite dry bulk shipper.  My favorite tanker stock is NAT.

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#4) On June 18, 2009 at 7:17 AM, kaskoosek (99.78) wrote:

Seano67

 

It doesn't matter to me, as long as they do not dilute my shares.

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#5) On June 18, 2009 at 7:23 AM, kaskoosek (99.78) wrote:

bullishbabo

 

Regarding NAT, I think they did an offering in May, right?

 

If so, I likely will not invest in a company ready to milk shareholders.

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#6) On June 18, 2009 at 7:27 AM, kaskoosek (99.78) wrote:

TNK is too much debt for my liking.

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#7) On June 18, 2009 at 7:37 AM, bullishbabo (100.00) wrote:

Yeah, I think they did an offering.  I do like it as a company with a long history of profitability and paying dividends.  They have, however, diluted common shares as they've grown in the past.  Their earnings and dividends almost look like those trusts and MLPs, except that they have a much stronger balance sheet. 

I do prefer ESEA to NAT, as I do own that one currently.  I'm more interested in the future share appreciation than in the dividends though. 

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#8) On June 18, 2009 at 9:17 AM, anticitrade (99.48) wrote:

I am flattered that you took a suggestion of mine.... and then dropped it all together.  ESEA looks like a good stock (my fair valuation values it at 7.97).  In this industry (water transport) I would actually recommend: TBSI, GMR, PRGN, or GNK.  They pretty much all have high betas though, so you better be optimistic about the economy.

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#9) On June 18, 2009 at 9:27 AM, kaskoosek (99.78) wrote:

anticitrade

 

I am optimistic about inflation.

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#10) On June 18, 2009 at 9:58 AM, bullishbabo (100.00) wrote:

I like ESEA because of its strong balance sheet and management's ability not to overpay for ships during raging bull markets.  That may be an oversimplification of whether they do have good management, but it speaks volumes when everyone else is getting up to their necks in debt to overpay for assets while the prices are inflated.  ESEA management tends to wait for asset prices to decline before buying them.  They do have an older fleet (don't know how old), but that's about the only negative thing I have to say about them. 

I've held TBSI in real life before and made a bit of money on them.  I do know I took a long look at PRGN before as well.  I've seen only a small window of anticitrade's track record, but I'd say he has a good idea how to beat the market going forward. 

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#11) On September 17, 2009 at 9:46 AM, neldon1 (< 20) wrote:

knightsbrige will take delivery of two dry bulk carriers by years end.  Should equate to increased 2010 earnings.  Price is about 50% under average value.  Risk/return about even.

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