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Genco Shipping & Trading Ltd. Message Board

  • ex_hacker202 ex_hacker202 Dec 23, 2010 1:06 PM Flag

    Did anyone know about this?

    I was just reading a MF article on GNK, it had a link to their GNK discussion page, and I stumbled upon this gem of information which may make me rethink my recent decision to move out of GNK and into GLNG:

    "The Panama Canal is undergoing a massive expansion which should double its capacity. The Canal upgrade is scheduled to be complete in 2014. My guess is the folks at GNK know this, and that is why they have been purchasing mainly jumbo vessels. Jumbo vessels are the vessels that will benefit most from the Canals' expansion, because now, the jumbo vessels cannot get through the canal. However, once the Canal expands, this will make shipping on these type of vessels more attractive. Essentially GNK is gobbling up large jumbo vessels cheap when the conventional wisdom is that these vessels are not economical, knowing that in 2014, these vessels will be much more valuable after the Canals' expansion"

    So if you/we/I can handle what looks to be some short term pain (ok, 2-3 yrs ain't exactly a short term), it looks like GNK will EXPLODE in 2014, if not before then. Still think we go down lower in 2011, how much is anyone's guess....but if the P/E stays at the current 3.37 and the analysts are correct about 2011 earnings being ~ $2.74, we could be looking at a $9-$10 stock here.....back to the 2008-2009 levels where I luckily purchased most of my shares (although a string of swing trades has raised my basis up to $11.5, I still have a bit of a comfort margin against steep drop in the pps).

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