XMFSinchiruna (28.57)

XMFSinchiruna's CAPS Blog

Helping You Find Relative Strength Dry Bulk

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May 26, 2010 – Comments (12) | RELATED TICKERS: DSX , DRYS , NM

For as long as I've been writing about dry bulk stocks here at The Motley Fool, I have consistently heralded Diana Shipping (DSX) as the best in her class, and added Navios Maritime (NM) and Genco (GNK) as bastions of relative strength within a severely impaired industry. I have consistently expressed concern for both Eagle Bulk Shipping (EGLE) and Excel Maritime Carriers (EXM) on the basis of their oversized debt burdens and more aggressively counter-cyclical growth initiatives, and I have never ceased in trying to warn investors away from DryShips (DRYS) as a speculative play unfit for the risk-averse portfolio.

I have taken my share of flack over the past couple of years from fans of DRYS or other lesser names in the sector for not painting them in a better light.

At this key juncture for the sector, where renewed credit woes in Europe and the U.S. are set to collide with persistent commodity demand from Pan-Asia, I thought I'd take a moment to see how my calls have fared thus far.

As it turns out ... not so bad. :)

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12 Comments – Post Your Own

#1) On May 26, 2010 at 9:26 AM, XMFSinchiruna (28.57) wrote:

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#2) On May 26, 2010 at 9:30 AM, XMFSinchiruna (28.57) wrote:

There you see three clear groupings in the 2-year chart: DSX, NM, and GNK up top, EXM and EGLE in the middle, and DRYS at the bottom of the barrel.

It hasn't been pretty for any of them lately, but when it comes to long-term prospects I believe the most reliable growth will come from the very same relative outperformers, with DSX primes to outpace the fleet on the base of superior strategic planning.

Fare winds and following seas,

Sinch

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#3) On May 26, 2010 at 9:31 AM, XMFSinchiruna (28.57) wrote:

Sorry for typos ... that should read: "primed to outpace the fleet on the basis of superior strategic planning".

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#4) On May 26, 2010 at 9:37 AM, IIcx (< 20) wrote:

rec +1: I think the dry bulk sector will do very well from here -- rates are improving and it hasn't participated to the extent of the other shipping sectors.

http://shipping.capitallink.com/

Other names I like include PRGN, CPLP, SB, and FREE. FREE is one I own at the moment, it's undervalued (in my opinion) and has been playing the improving spot market. PRGN plays long contracts and offers a dividend.

There are also a number of great names in the tanker sector but I'm getting off topic.

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#5) On May 26, 2010 at 9:50 AM, XMFSinchiruna (28.57) wrote:

While everything else has been tanking (except for gold), BDI has been surging wildly of late. There may be less real slowing of pan-Asian demand thus far than many presume to be the case when watching Asian stockmarkets.