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EnigmaDude (58.74)

Who's the Best Shipper?

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August 26, 2008 – Comments (8)

Who is the best shipping company for a real-life long position?

Some that I have been following include:

NM EXM TNP DSX ESEA SFL ONAV

It would be great if they offered a nice dividend, too. I think DRYS is over-valued and EXM just reduced their divy.

SFL just increased theirs.

DSX was just downgraded but pays 12.5% divy.

TNP offers 5% but has one of the lowest P/B and P/E ratios.

NM has a forward PE of 7.0 and PEG of 0.1

ONAV looks poised for growth and offers 13+%.

 Any thoughts on these picks? If you had to add only one to your portfolio, which would it be?

8 Comments – Post Your Own

#1) On August 26, 2008 at 3:40 PM, puccini3005 (30.10) wrote:

EnigmaDude - I am currently long in EXM, since the merger w/QMAR.  As with most of these shippers, their stock price has not matched their growth.  So I think this is definitely a good time to get some shipping positions.  I also think you are mistaken on this point:

"...EXM just reduced their divy."  They actually just increased it (by 100%), announced with their last earnings:

http://biz.yahoo.com/iw/080811/0423565.html

Anyway, I watch alot of the shippers, too; but I don't know if I can add much wisdom to your research.  I've been partial to DSX and NM.  NM has better growth numbers, but a higher debt/equity; the dividend isn't as generous, but the payout ratio is a calmer 10%.  Diana's payout ratio is 119%.  But if you're talking dividends you have to include FRO - 20% (98% payout ratio).

Some other leader stats:  Rev Grwth, Qty YOY - EXM - 450%; EPS Grwth, Qty YOY - SBLK - 2,724%; ROE - FRO - 125.76%

FRO also has nice cash flow.  The only downside I see to FRO is a fairly large D/E: 5.949.  Now that I think it through, my answer is FRO (it wasn't when I started this response)

And I have a question for you: why do you think DRYS, w/a PE of 4.4 (and EPS Grwth, Qty YOY of 160%) is overvalued?

Don't forget about TBSI and SSW (SSW is a container shipper) if you haven't already looked at them.

 

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#2) On August 26, 2008 at 5:37 PM, GNUBEE (< 20) wrote:

Anyone tracking Ag shippers? Just read an article (bloomberg?) stating that shippers of US ag products (corn,wheat etc.) are a massive bottleneck. And that railcars are commanding a premium.

Now I have to look into a way to play this

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#3) On August 26, 2008 at 7:46 PM, EnigmaDude (58.74) wrote:

puccini,

Thanks for setting me straight. I was a bit rushed in my limited analysis and don't remember where I saw the headline regarding a reduced dividend. Sure enough when I checked again, I see that EXM raised the divy 100%. I'll have to take a closer look. I have liked EXM for a while now and it's a huge bargain below $30 (it ended at $32.58 today).

Regarding DRYS - I just think the stock will come down a bit more with a D/E of 1.48 (which is not that bad) and Price/Book of 2.4 (still not bad). But they have gotten so much analyst coverage, etc that I think the downward pressure will remain for a while.

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#4) On August 26, 2008 at 7:46 PM, EnigmaDude (58.74) wrote:

puccini,

Thanks for setting me straight. I was a bit rushed in my limited analysis and don't remember where I saw the headline regarding a reduced dividend. Sure enough when I checked again, I see that EXM raised the divy 100%. I'll have to take a closer look. I have liked EXM for a while now and it's a huge bargain below $30 (it ended at $32.58 today).

Regarding DRYS - I just think the stock will come down a bit more with a D/E of 1.48 (which is not that bad) and Price/Book of 2.4 (still not bad). But they have gotten so much analyst coverage, etc that I think the downward pressure will remain for a while.

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#5) On August 26, 2008 at 10:23 PM, gjsteele71 (44.31) wrote:

I like NM. They recently increased their fleet and are poised to take advantage of huge demand for imports in China.  A P/E of 3 and a nice dividend don't hurt.

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#6) On August 28, 2008 at 1:41 PM, puccini3005 (30.10) wrote:

Enigma, 

I saw this yesterday and thought it was appropos to the discussion here.  You probably already saw it...

 An ETF for the Movement of Stuff
As it turns out, if you can't decide which shipper you like best (and you like ETFs), you don't have to choose just 1!
ESEA is the largest holding, but I confess I have a bit of a problem w/SSW at #2.  With all the great shipping stocks out there, I'm not sure that one would make my top 5.

ps. Point taken w/DRYS.  That thing has always been a source of controversy and divided opinion.  I always like to get peoples' thoughts on it.  Keep your eye on it though.

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#7) On August 30, 2008 at 11:24 AM, EnigmaDude (58.74) wrote:

thanks for pointing out SEA, but like you I am not sure SSW is a good pick for top 5 holdings.  There are so many other good ones out there like TBSI (which I am not considering cuz they don't pay a dividend), EGLE, NM (which I like a lot), and how about PRGN?

PRGN is a Zacks #1 Rank (Strong Buy) stock. The company is cheap, trading at 6.80x forward earnings. It has surprised on estimates 4 consecutive quarters by an average of 26.52%. Read the Apr 25 analysis.

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#8) On September 05, 2008 at 6:38 AM, puccini3005 (30.10) wrote:

Hey, I checked out PRGN.  Thanks for the heads up, and the article.  I had not been watching that one before, but I sure will be now.  Those are great numbers!

As a footnote, I bought some FRO on tues, after the big pullback.  The purchase was a result of research set into motion by your post, so, Thanks!  I'm pretty happy and confident about that purchase.  I didn't research PRGN till after that, or I would have had a tougher choice.

If someone were to ask me right now what the best stock buys are right now, I would say PRGN and FRO.  Period - not just shipping.  Of course, given that the recent "commodities swoon" has me wearing the "dunce cap" I don't recon anyone will be asking ME that, but oh well! hahaha!

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