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Helen of Troy Limited Message Board

jettcity_2000 4 posts  |  Last Activity: Dec 5, 2014 12:16 AM Member since: Apr 26, 2000
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  • jettcity_2000 by jettcity_2000 Dec 5, 2014 12:16 AM Flag

    In caae no one noticed, DSX announced a time charter that is based on the daily BCI, which is a spot market contract.

    I am not concluding whether this is good or bad, but simply pointing out that in the past 9 years that i have followed the company, I can't recall a single spot market contract. DSX has always emphasized that visibility in cash flows is more important than trying to out-guess the market. over the course of a shipping cycle Thus, fixed priced time charters have been the basis for all contracts.

    The logical extrapolation is that DSX management must think that the spot market will likely return a value considerably greater than the expected fixed contract. But we will have to hear from DSX during the next cc - guaranteed that this issue will be address or asked by analysts.

  • Reply to

    They blew the doors off of earnings forcast..

    by jrmills0014 Nov 25, 2014 4:46 PM
    jettcity_2000 jettcity_2000 Dec 4, 2014 11:49 PM Flag

    I've been busy with the day job and slow to circle back.

    Yes, the difference is the $12 million paper gain listed on their income statement, which is close the $0.14/shr that you cite. This is a paper gain in that the purported gain or loss will change from Q to Q based on changes in the DCiX book value. A gain or loss is only real after DSX sells the DCIX shares.

    Net income and book value can be deceiving for shipping companies. If you think we are near the bottom of the shipping cycle, my opinion is that one should focus on operating cash flows, liquidity, and debt maturities.

    For DSX, operating cash flows have steadily increased since Q3-13. Liquidity and balance sheet are quite healthy. Shipping cycles can be long, so if one has a 5-year investing horizon, DSX at $7 is very attractive IMHO.

  • jettcity_2000 jettcity_2000 Nov 25, 2014 11:12 PM Flag

    DCIX will not be paying a higher divy next Q. You don't understand DSX/DCIX management. I have followed this company closely since 2005.

    They will employ cash to increase anticipated returns based on the current shipping cycle and only will return cash via a divy when ship values increase significantly from where they are today. They just bought a 5,000 TEU panamax that was 9 years old for $15 million. The scrap value is probably close to $10 million. Given that we are in the early upside cycle in the market due to demand recently exceeding supply coupled with a very low new-build program in this TEU class, the potential gain in such investments is huge. DCIX will preferentially spend cash on these types of investments until ship values increase such that divys provide a better return to shareholders.

    Nonetheless, perhaps we agree that DCIX will continue to acquire vessels at very attractive prices, and DCIX currently offers an attractive risk-reward investment.

  • Reply to

    They blew the doors off of earnings forcast..

    by jrmills0014 Nov 25, 2014 4:46 PM
    jettcity_2000 jettcity_2000 Nov 25, 2014 10:43 PM Flag

    No - they did not. You need to dig deeper. Their beat was due to a non-cash write-on of their $40 million investment in DCIX. They invested at $2.51 while the GAAP book value was $3.5. This is a one-time paper gain only - listen to the cc to confirm. Subtract that out and I estimate that they lost $0.06/shr. .

    Don't get me wrong, I have think DSX management is the best in the business. They provide a comprehensive analysis of the shipping market and an honest opinion of the outlook whether good or bad. They have generally been spot on. Listen closely to DSX management, we likely a couple years out before the market turns.

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