Diana is a fine company. I decided to invest heavily in QMAR, which does not have a Yahoo board. Both of these companies will excel, but here is why I opted for QMAR:
1.) Ownership is heaviily alligned with the coal industry. Corbin Robertson owns the biggest coal deposits in the US and owns 6 million of the 23 million shares. His son is buying shares on the open market. Without promising it, they have suggested repeatedly (most recently at the Thursday Jeffries conference) that the Robertson realationship will result in substantial long term contracts for QMAR.
2.) Much of the QMAR fleet already has contracts exceeding 2.5 years at 25k / day. That's phenomenal. And more than twice th break-even level. It will support substantial additional leverage.
3.) QMAR just closed on two very modern Cape class ships. One of them has a long contract at high rate.
4.) The debt of QMAR is very manageable, but significantly more as a ratio of capital than with Diana. This may sound odd. But, if you believe (as I do) that rates will increase, you want to be leveraged. That leaves more for the equity owners (me). Diana could use its no-debt balance sheet to acquire more ships, but they then have to deploy them and find business for them, or else just do cheap short charters as they are doing presently.
My conclusion is that the affiliation with Robertson's coal interests, and the profitable long term charters with much of the fleet, and the reasonable leverage, makes QMAR an unbelievable (and hidden) value for equity owners.
The enterprise value for QMAR is about what it would cost to buy its fleet today. There is no premium. If you believe in shipping dry bulk to China (and India), pull the trigger on QMAR. I am delighted Barron's wrote about Diana, because this gave me time to accumulate QMAR, and now I am unabashedly touting it.
<<You will see the Name Robertson Corbin III Jr. Mr Corbin, is the president and Chairman of NRP.>>
Jr. is the father (age 58 or so) and the NRP chairman. He owns 6M + shares of QMAR. The recent open market insider buyer is his son (Corbin, III) who is on the board. The greek president (former Stenmar guy) also buying on th eopen market. All of this is at the mid 11 price range, which is where the stock is now.
Big question for me is whether father or the other major shareholder (Australian coal intersts) lightens up in mid-January when the lock-up expires. I do not think they will. (Why would son be buying?)
The connection with the major coal producers makes long term contracts at good prices an ace in the hole for QMAR.
Believe it or not, I actually viewed that as a positive. They're making enough to pay their dividend from their low-rate charters, and once it comes time for renewal the odds are favorable for them to renew at higher rates, thus increasing their payout. One thing to look out for, though, is after they exhaust the remainder of their 150 mil credit facility (There'll be around 35-38 left after accounting for the 2 new ships they bought), they'll most likely hit the market with a secondary offering to draw it back down again.
<<Last week, Baylor threatened legal action against Methodist if the hospital does not cease actions that Baylor alleges are interfering with Baylor's operations, including Methodist's "aggressive recruiting" of Baylor faculty members. >>
Interesting. Good for Corby.
<<Am I missing something here? >>
The man has a reputation earned through serious accomplishment in the coal industry. He makes more money in a day than most of make in a year.
He has made money for his investors. And he is respected in the community (i.e. his Baylor involvement).
If you don't see the relevance of investing in a company where that sort of man is at the helm, you haven't been burned (fortunately) by the "other type."
I'm also new to the shipping stocks. The high yield attracted me. I've been very successful investing in energy MLP's and wanted a way to diversify. I own EGLE before Barrons, DSX before barrons, GMR, and Qmar, so far. As a previous poster suggested, everone who is interested in this sector should do their own due diligence. A good starting place for the above companies would be the jefferies conference presentations for each company.
I was initially drawn to Quintana because it kept showing up in the Wall Street Journel under largest individual insider purchases. That is always a great sign. Go to Qmar on Yahoo and look under insider transactions. You will find 7 purchases in the last 2 1/2 weeks in the open market.
You will see the Name Robertson Corbin III Jr. Mr Corbin, is the president and Chairman of NRP. Natural resource Partners,one of the largest coal owners in the US aside from the Feds.
The plan according to the president of Quintana is to use the "sponsor" of NRP to fill one of the two new Capes that they just bought that does not have a time contract. This is mentioned in the Jefferies presentation.
The dividend policy is located on the corporate Website for Quintana. It is to pay 65%, not 60% as someone else said. This strategy is in place so that they can use retained earnings to fund the accretive aquisitions that they plan in the future.
The IPO was inially priced to come at 14-16 then 12-14, finally because of the crappy market 11.50, around the same price the insiders have been buying.
The current dividend is for the period through June 30. They started operations April 12th, they did not have the fleet yet. That dividend is meaningless.
These are the factors I used when I bought the stock.
Good luck to all.
July 28, 2004
More Medical Center political strife
Daniel Arnold, a member of the Baylor College of Medicine board of trustees and the former chairman of that board, has sent the full board a July 14 letter calling for Baylor President Dr. Peter Traber to be fired for failed leadership. Mr. Arnold's letter states that Traber's management of Baylor is "deleterious" and "divisive," and that "his lack of realistic vision and fundamental errors in judgment" are not what Baylor needs in a leader. Here is the Houston Chronicle article on this latest Medical Center dustup. The letter is expected to be discussed today at a meeting of the 48-member board.
Corby Robertson, the current chairman of the Baylor board, told the Chronicle that he believes that Dr. Traber has the board's support
Mr. Arnold sent his letter amid the recent political fallout over the split of the long teaching relationship between Baylor and The Methodist Hospital (earlier posts here). The institutions have been in open conflict since deciding to sever their 50-year relationship in which Methodist served as the teaching hospital for Baylor students and residents. Last week, Baylor threatened legal action against Methodist if the hospital does not cease actions that Baylor alleges are interfering with Baylor's operations, including Methodist's "aggressive recruiting" of Baylor faculty members.
The "fleet" is currently 3 ships with two more on the way. There are no major institutional or mutual fund holders. The dividend is miniscule. Vector Vest values the stock at $4.70 per share, so that at $11.75 per share it is highly overvalued. It is not transparent in regard to its financials.
DSX at $15.90 is valued at $27.56 by VV.
The "fleet" is currently 3 ships with two more on the way. There are no major institutional or mutual fund holders.
QMAR has 8 Panamax w/ 2 Capes to be delivered. What are you talking about ?
Check the Jeffries conference and the slides of the President. You are still referring to the preoffering S-3 data.