Shipping Stocks

[Myth465]

It seems as though the cycle may have bottomed in Shipping.

 

I own KSP and SSW but what does the board think about the oil tanker stocks and the dry bulk shippers.

 

I follow TNP, and DHT and think things are getting interesting. Right now they are plays on the economy and I dont think the timing is right. I have also looked at DRYS and it seems very cheap. They have some current debt coming due, but the price looks right. Who was paying 110 for it a year and a half ago?

 

 

 

I would prefer for the economy to stabilize before moving in, but this seems like a good industry to watch, it should bottom and begin to rebound sometime over the next 2 years or so. What do you all think?

[CONeal]

While there are plenty of companies that look cheap in the shipping industry, I can't help but wonder if the containers themselves are a better investment.

 

With shipping companies going towards 'slow freight' this would require more containers being used at any particular time.  Not sure if this is a fad but something I've been thinking about.

[alwaysinvert]

I think it's an industry with far too bad ROIC. I can see no possible moats, either. Too hard for me, I sort it in the same pile as the textile business (the brk example).

[keerthiprasad]

DRYS is a company I looked at long ago and am glad I stayed away.  I would put the CEO in the biglari category.

[bz1516]

I took a position in BALT, not too long ago.  BALT has a decent b/s and safety and lots of upside as well. 

 

There are some shippers that are highly leveraged and carry substantial risks, while others like NMM and DSX have comparatively little risk, but will not participate when conditions become favorable again. 

 

I think there is a moat for shippers..  Its just that it lasts only 2-3 years.  So best to get in early and not overstay.

 

Dry bulk shippers are my preferred way to play China.  You have to like aggregate demand in China to buy shippers.

 

Jefferies recently put a buy on the group.

[rogermunibond]

http://www.sec.gov/Archives/edgar/data/1581804/000119312513430440/d622542df1a.htm

 

Wilbur Ross owned Navigator Holdings is filing for an ipo. LPG and other NG liquid products should be  busy maritime markets with lots of US and Middle East NG liquids looking for markets in Asia and Europe.

[bz1516]

Since my first message in this thread where I reported on my position in BALT I've since taken a position in Safe Bulkers, SB.  Whereas BALT is completely leveraged to BDI spot with heavy exposure to Capesize, SB is somewhat less exposed to BDI spot and more exposed to Panamax and smaller sized ships.

 

Dry bulk shipping is driven by BDI spot and time charter rates, which are in turn driven by the Chinese economy and expected increases in shipping capacity.  Its cyclical as some value plays are, but we appear to be at the beginning  cycle.