FreeSeas, Inc. (NASDAQ:FREE)

CAPS Rating: 2 out of 5

An independent commercial shipping company that operates in the drybulk shipping markets through its three wholly owned subsidiaries: Adventure Two S.A., Adventure Three S.A. and Adventure Four S.A.

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Member Avatar jed71 (42.20) Submitted: 8/19/2014 12:50:13 PM : Underperform Start Price: $0.82 FREE Score: +75.35

Greek bulk shippers are probably one of my least favorite "industries" for real life investments. Notwithstanding the shadiness of some of these companies, they have performed extremely poorly over the past 5-6 years. This one is a perfect example. The stock sat at $80 a share in 2012 – yes, that’s right, folks. If you had bought this stock from back in mid-2012, you would have a 99% loss. The company has been reverse split so many times, the mid-2007 high shows a price of $2,148 a share!!

They got a breath of life a few days ago when Nasdaq gave them a gift with a “regained compliance” letter in regards to the Nasdaq required shareholder’s equity level. I don’t personally think this matters much. They are still sitting at the $.80 range and I am not sure if their upward trajectory will last much longer. They just filed a F-1 with the SEC requesting sale of additional common shares. The price per share they have listed in the F-1 registration statement is $0.48, slightly lower than the close at the time when the F-1 was filed. My guess is that they do not get much more than this price when they go to market. In addition, they just put a big tranche of preferred stock in front of all the common stock back in November of 2013. It looks like they got about $10MM in cash in exchange for those shares. It’s important to note, it is quite clear in those old docs, the preferred shares have rights before the common shareholders. I am also curious what has happened to that cash that they now have need for an additional $3.6MM such a short time later.

If you look at the financials, the picture is very bleak. The revenue for this firm was $57.5MM in fiscal year 2009 and has declined to just over $6MM in 2013. Their losses have steadily grown over the past several years and reached an enormous $48.7MM in fiscal year 2013. They have built up a large accumulated deficit of ($172MM) and continue to carry debt of $60MM. Nothing I see here makes this firm look viable moving forward. I have serious going concern questions about this firm. I am red thumbing this, but since it’s so low in price, I could get burned in the short term. Please be careful if you join me as the chart is still showing a bit of strength.

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Member Avatar SqwiiTrader (< 20) Submitted: 2/19/2014 6:40:46 PM : Outperform Start Price: $1.67 FREE Score: -95.50

Tom Demark monthly 13 buy signal , bull market starting

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Member Avatar tobywan (27.50) Submitted: 12/13/2013 12:33:27 PM : Outperform Start Price: $1.12 FREE Score: -92.72

Just a shot at long term hopefullness. I'm not looking at the stock in terms of market indicators but as how I perceive the company. I like shipping companies, a lot, they are one of the most underated industries considering how necessary they are to our way of life. Free seas isn't anything special but they have a plan for removing debt, increasing revenue and changing leadership. I believe they have reached their low following the reverse split and while such splits don't typically bode well for a company their immediate investment in new revenue building assetts builds a sense of trust.

Again this is just a hopeful gamble by a novice/beginner

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Member Avatar columbianflash (< 20) Submitted: 12/5/2013 9:04:30 PM : Outperform Start Price: $1.30 FREE Score: -93.72

seems to look good, only after a few months or so. the gains a too much along with the price being so flexible.

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Member Avatar kenzo08 (< 20) Submitted: 9/27/2013 12:07:09 AM : Outperform Start Price: $0.83 FREE Score: -92.85

yes

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Member Avatar justaboutperfect (< 20) Submitted: 5/16/2013 4:21:55 PM : Outperform Start Price: $0.69 FREE Score: -92.13

All the bad news is out and time to buy when the smart shorts are covering.

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Member Avatar brandonschklar (91.24) Submitted: 3/10/2013 10:26:08 PM : Outperform Start Price: $1.78 FREE Score: -115.51

i wish you can buy any thing for free.....

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Member Avatar rickyt1986 (81.32) Submitted: 3/7/2011 3:12:42 PM : Outperform Start Price: $3.36 FREE Score: -143.57

long on all my ship stocks a good company is hard to sink in a needy economy

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Member Avatar KratosKlaso (< 20) Submitted: 2/7/2011 8:25:09 AM : Outperform Start Price: $3.16 FREE Score: -143.27

Undervalued currently

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Member Avatar whomonkyoulus (28.53) Submitted: 10/13/2010 3:51:55 AM : Outperform Start Price: $1.49 FREE Score: -128.91

10k * 30 = 300; X10 = 3M
* 9
27M - exp
=15M
PE ~ 2-5

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Member Avatar ExploitTopFools (96.81) Submitted: 7/6/2010 6:06:17 AM : Outperform Start Price: $5.35 FREE Score: -176.06

shippers: free,tbsi,ocnf,drys,sblk,ultr,egle

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Member Avatar kutaone (< 20) Submitted: 5/3/2008 10:53:41 PM : Outperform Start Price: $32.56 FREE Score: -143.82

Another boat coming on line later this year..continuing to increase fleet size...Great divy...

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Member Avatar zsam1 (< 20) Submitted: 4/28/2008 5:18:07 PM : Outperform Start Price: $32.73 FREE Score: -145.61

undervalued

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Member Avatar 1234azi (< 20) Submitted: 4/26/2008 11:11:04 PM : Outperform Start Price: $32.87 FREE Score: -145.10

will out perform in the coming months.very sold foudation the company have.

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Member Avatar TheCorrectCall (51.61) Submitted: 4/6/2008 2:44:58 PM : Outperform Start Price: $29.51 FREE Score: -147.05

FreeSeas is a dry bulk carrier currently operating with 5 ships. Through recent acquisitions, that number will be up to 8 in the next six months. But that’s not all that’s growing…

For the year just ended, FREE’s revenues were up 71.8% for 2007 as compared to ’06. The consensus estimate for sales in 2008 is hair under $63 million, up from 20.15 million in ’07. That’s some supercharged growth.

Unfortunately FREE was unable to produce a profit for 2007. However, the company has improved its balance sheet by paying off some loans and is expected to be profitable for the year.

The consensus estimate from the 2 analysts that cover FreeSeas is $1.07 per share for the current year. At that estimate, FREE trades at roughly 5 ½ times its forward earnings.

This is where the fun starts. The average P/E ratio of the 50 companies that make up the Dow Jones Marine Transportation Index is 12.89. At the average P/E, FREE shares would be valued at $13.79, a return of 132%.

Let’s go back to FreeSeas revenue expectations. At 63 million, FREE is currently trading at 1.5 times its projected sales. The average DJ Marine stock trades at 3.39 times sales. At the industry average, FREEs share price would be a little less sexy at $13.35 per share.

But wait, there is more… On February 7th, FREE announced a quarterly dividend of 17.5 cents per share. That totals up to 70 cents per year. At the current stock price, that’s a 14% yield. According to FreeSeas CEO, Ion Varouxakis, it is the company’s stated policy to continue paying that 17.5 cents every quarter in 2008. Try to find that at your local bank.

So even if all of our projections are wrong and the stock doesn’t move an penny in the next 12 months, you’ll make 14% on your money. How sweet is that?

But quite frankly, If FreeSeas meets its 200% growth target for the year ahead, a 13 P/E and a 3.39 price to sales ratio seems kind of low.

We would also expect such explosive growth to catch the eye of more than 2 analysts, meaning more exposure for FREE.

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Member Avatar equalfuture (21.20) Submitted: 3/23/2008 8:34:46 AM : Underperform Start Price: $24.88 FREE Score: +152.02

dear wordpicker,

company location: bermuda? greece? usa? with these shipping stocks its a little difficult to find the owner,

the owner is from where? they use a flag from what country?

a little confusing, now if things go wrong, where do i find the CEO to pay my respects and a little extra.

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Member Avatar murakh13 (< 20) Submitted: 3/16/2008 8:45:51 PM : Outperform Start Price: $23.07 FREE Score: -160.89

Will possibly double in one year
Also about 13% dividend yield

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Member Avatar zwade23 (< 20) Submitted: 3/14/2008 3:51:25 AM : Outperform Start Price: $25.32 FREE Score: -153.41

Come on now. Everything, I mean EVERYTHING is made in China. And God forbid, they are not going to keep all the lead-based painted toys for themselves. Enough said

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Member Avatar mvanneman (< 20) Submitted: 3/7/2008 7:18:20 PM : Outperform Start Price: $23.38 FREE Score: -156.87

Dry bulk shipping is going to be strong for the next couple of years due to a shortage of ships and an increase in the demand for them. China has doubled its need for iron which it gets from Brazil. China has also stopped shipping coal to North and South Korea and Japan and they are now getting there coal from Australia. The need for grain/raw materials in all emerging nations is also driving the need. Finally the shipbuilders are tied up with specialty orders and are not accepting anything new until 2009 which means that no new ships for this sector til late 2009 or 2010. FREE is down by over half of where it was at in October (this cycle was seen by most of the dry bulks) and should start going up around April. It should reach $10-$12 a share by the fall.

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Member Avatar grammatoncleric (< 20) Submitted: 2/14/2008 11:27:37 PM : Outperform Start Price: $26.42 FREE Score: -151.41

dryship

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