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Teekay Tankers Ltd. Message Board

mikeyhorsehead 25 posts  |  Last Activity: 23 hours ago Member since: Sep 8, 2012
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  • Reply to

    Tanker Equities as Hedges?

    by play_tow Jan 30, 2015 10:50 AM
    mikeyhorsehead mikeyhorsehead 23 hours ago Flag

    Good theory. Hope Angeliki is buying.

  • Reply to

    Nobody needs tankers any more.

    by trubulator12345 Jan 28, 2015 11:55 AM
    mikeyhorsehead mikeyhorsehead Jan 28, 2015 12:05 PM Flag

    Hard to understand. Troubling. Greece fall out? Doesn't make sense.

  • mikeyhorsehead by mikeyhorsehead Jan 27, 2015 5:25 PM Flag

    Item 7.01. Regulation FD Disclosure
    Greg Maffei, President and Chief Executive Officer of Liberty Broadband Corporation (the "Company"), will be appearing on the CNBC television program "Squawk Box" from 7 a.m. to 9 a.m. ET on January 28, 2015. During his appearance, Mr. Maffei may make observations regarding the Company's financial performance and outlook and the impact of current economic trends.

  • U.S. Oil Exporter Scouting for Buyers Signals OPEC Test
    By Serene Cheong and Sharon Cho - Jan 22, 2015
    Enterprise Product Partners LP is looking to sell a year’s supply of U.S. ultra-light oil to the global market, signaling another challenge for OPEC as it contends with the U.S. shale boom.

    The company in Texas is offering to export 600,000 barrels a month of condensate from March, according to a tender document obtained by Bloomberg News. Enterprise received government approval in 2014 to ship the lightly processed oil from U.S. shale formations. Rick Rainey, a Houston-based spokesman, didn’t respond to calls or an e-mail seeking comment.

    The Obama administration last month signaled that companies can legally export stabilized condensate without government approval, a move that Citigroup Inc. said may encourage shale drilling and thwart Saudi Arabia’s strategy to curb U.S. production. With American companies pumping at the fastest rate in more than three decades, members of the Organization of Petroleum Exporting Countries are maintaining output to defend market share.

    “The supply situation for U.S. condensate won’t change dramatically,” Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo, said by phone. “They will continue to bring more cargoes into Asia. There’s a comparatively bigger pool of buyers here.”

    The U.S. produced 9.19 million barrels a day through Jan. 9, the most in weekly records dating back to January 1983, according to the Energy Information Administration. The nation’s oil boom has been driven by a combination of horizontal drilling and hydraulic fracturing, or fracking, which has unlocked shale formations from Texas to North Dakota.

    Export Guidelines

    Condensate can be exported if it is run through a distillation tower, which boils off volatile gases from the oil, U.S. government guidelines published last month on the website of the Commerce Department’s Bureau of Industry and Security showed. That may boost supplies ready to be sold overseas to as much as 1 million barrels a day by the end of 2015, according to Citigroup.

    While the guidelines were the first public explanation of steps companies can take to avoid violating export laws, they didn’t end the ban on most crude exports, which Congress adopted in 1975 in response to the Arab oil embargo. Lawmakers in Washington are trying to end a 40-year-old law that restricts overseas oil shipments to just a few markets.

    Enterprise (EPD) began offering U.S. condensate shipments to overseas buyers last year after the company and Pioneer Natural Resources Co. received government approval for the sales. BHP Billiton Ltd. also sold supplies of the ultra-light oil.

    Japanese traders Mitsui & Co. and Mitsubishi Corp., as well as South Korean refiner SK Innovation Co., have previously bought some of the cargoes offered from the U.S.

    U.S. Growth

    The U.S. exported a record amount of crude in November after a five-year run of production growth that has made the country the most oil-independent in 20 years. Shipments surged 34 percent to average 502,000 barrels a day, the most in records dating back to 1920, according to the U.S. Census Bureau and the Energy Information Administration.

    “We’re still going to see growth in production in the U.S. in 2015 compared to last year,” Victor Shum, a Singapore-based vice president at IHS Inc., a consultant, said by phone. “Shale-related activities will not step down altogether. The U.S. will still have rising supplies looking for a market.”

    OPEC will probably blink first in its battle with U.S. shale drillers, according to a quarterly survey of Bloomberg subscribers. Forty-nine percent of analysts, traders and investors polled said OPEC producers will have to reduce their production target for 2015 as U.S. shale drillers won’t scale back quickly enough. About 34 percent said shale drillers will cut output in time, while 17 percent were uncertain.

    OPEC’s Secretary-General Abdalla El-Badri on Jan. 21 reaffirmed the group’s stance to stick to quotas. Producers outside of OPEC should be first to curtail their output, he said in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland. Oil prices will rebound instead of extending declines to as low as $20, he said.

  • World’s Largest Traders Use Offshore Supertankers to Store Oil
    Companies Are Buying Oil Now to Sell Later When Prices Rise
    Updated Jan. 19, 2015 3:07 p.m. ET
    The supertanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off the coast of Singapore, storing millions of barrels of oil for Vitol SA, a giant trading house.

    The TI Oceania supertanker which is being used by oil trading house Vitol to store oil until the commodity's price rises. ENLARGE
    The TI Oceania supertanker which is being used by oil trading house Vitol to store oil until the commodity's price rises. OVERSEAS SHIPHOLDING GROUP
    According to shipbrokers and analysts, the 3-million-barrel megaship—one of the largest in the world—is just one example of efforts by traders to turn a profit in the slumping global oil market. The strategy is simple: buy and store oil at cheap prices now, selling futures contracts to lock in the higher oil prices expected later.

    “It is one of the easy ways to make money and that’s one of the interesting things about it from a trading perspective: It’s a counter cyclical source of profit for the Vitols and Glencores and Trafiguras,” said Craig Pirrong, a finance professor at the University of Houston, referring to a handful of the biggest oil traders in the world.


    Oil Prices Start Week in Negative Territory
    Oil-Price Quirk Sends Crude Out to Sea (Sept. 18, 2014)
    Singapore Oil Hub Expands to Neighbors After Outgrowing City-State (Jan. 23, 2014)
    According to shipbrokers and analysts, major traders including Vitol SA, Gunvor SA, Trafigura Beheer BV and Koch Supply & Trading Co. Ltd have chartered supertankers capable of storing a combined total of more than 30 million barrels of oil—many of them in the past few weeks. Vitol, Gunvor and Trafigura declined to comment. Koch didn’t respond to requests for comment.

    The opportunity to stockpile oil in such large quantities has come from the dramatic shift in the market for the commodity in recent months. Since June, prices have collapsed, tumbling by more than 50% amid soaring production from the U.S. and unwavering output from the Organization of the Petroleum Exporting Countries, at a time when global economic growth—the main determinant of demand—is slowing.

    The oversupply has given rise to a so-called contango in the market, when the current price of a commodity is lower than prices for delivery in the future. That makes it attractive for buyers to purchase oil now at the cheaper rates, store it and strike sales agreements at a higher price in the future, locking in profits.

    The price difference between the March and August contracts for Brent crude oil, the international benchmark grade, is currently $6 a barrel. That is the steepest premium since an oil-price slump in 2008 and 2009.

    For years, oil trading houses have contended with high prices and low volatility, which have squeezed margins. Firms have responded by investing in infrastructure like oil-storage tanks, terminals and refineries to gain flexibility in trading, as well as better information about what is happening in the market.

    Combined with the companies’ access to the physical oil market, these investments have made the trading firms uniquely well-positioned to exploit the shift in the market and store oil for a profit.

    Glencore PLC, a Swiss commodity-trading giant, and Trafigura Beheer, one of the world’s largest independent oil traders, have both already highlighted to investors that the market’s dramatic change since June is expected to bolster their profits.

    Onshore storage tanks are filling up fast. According to Citigroup Inc., China’s coastline storage facilities ran out of space as the country filled up strategic oil reserves last year. Stocks at the U.S. storage hub at Cushing, Okla., have risen more than 20% since December, according to Genscape Inc., a data provider based in Kentucky.

    That means more unusual storage options, such as the ships, are becoming increasingly popular.

    “Because so much oil doesn’t have a home right now, there is a frenzy of traders and companies looking to hire supertankers,” said Halvor Ellefsen, chief executive officer of Galbraiths, a London-based shipbroker .

    The last time there was a similar situation, in spring 2009, more than 70 million barrels of oil were stored in tankers, according to shipbrokers.

    The current tanker craze may not quite reach those levels, as the disparity between current and futures prices isn’t as steep at the moment. Bank of America Merril Lynch predicts the volume of oil stored on tankers could rise to 55 million barrels by the end of the second quarter.

    However, the potentially lucrative storage trade isn’t open to everyone, nor is it risk free. It requires detailed knowledge of the way oil is moved around the world that few outside a tightknit group of oil traders possess. Making a profit depends on numerous factors, including rates for freight and storage and, ultimately, finding a buyer for the crude.

    “If people think the contango is some kind of magical way to make money they are incorrect,” said Benoit Lioud, senior research analyst at Mercuria Energy Group, a Swiss-based trading house. “Storing big quantities of crude oil is not an easy game. It’s not a game at all.”

    —Costas Paris in London and Christian Berthelsen and Nicole Friedman in New York contributed to this story.

  • mikeyhorsehead mikeyhorsehead Jan 9, 2015 11:51 AM Flag

    Perplexing. Hope Angeliki is buying.

  • Oil Drillers’ Despair Gives Ship Owners Hope for Profit: Freight
    By Naomi Christie - Jan 9, 2015
    The oil glut that wiped $1 trillion off the value of energy producers and roiled currencies is giving tanker owners a reason to be cheerful: Demand for their ships to store that excess is about to surge.

    Oil traders could park as much crude offshore in the next few months as Denmark consumes every year, according to estimates from JBC Energy GmbH and BP Plc data. The International Energy Agency projects on-land storage tanks in industrialized countries may be full by June.

    Oil collapsed by almost half since the middle of last year as members of the Organization of Petroleum Exporting Countries maintained output amid a global excess estimated by Qatar at 2 million barrels daily. The same surplus has also helped widen a price structure called contango, where future costs are so far above today’s that it rewards traders to buy cargoes now and sell them later.

    “There’s bound to be broader inventory builds,” Jonathan Chappell, a shipping analyst in New York for Evercore Partners Inc., said by phone Jan. 6. That “will probably lead to some traders taking advantage of the contango.”

    Brent crude oil for August traded at about $6 a barrel more than contracts for February so far this week, according to ICE Futures Europe exchange data. That’s around the level needed to cover hiring a tanker and all the associated costs, according to JBC, an adviser to some oil-producing countries.

    Brent for February settlement, the global benchmark grade, fell 42 cents to $50.54 a barrel on the London-based ICE Futures Europe exchange at 10:40 a.m. London time. The August contract fell 22 cents to $57.03 a barrel.

    60 Million

    Between 30 million barrels and 60 million barrels will be stored on tankers in the coming months, JBC predicted Jan. 6. Denmark consumed about 58 million barrels in 2013, according to the most recent estimates from BP.

    “There’s a strong possibility that we will see floating storage at some point this year,” Svetlana Kourmpeti, a London-based senior market analyst at E.A. Gibson Shipbrokers Ltd., said by phone Jan. 5. “The contango is getting steeper.”

    When the market is in contango, a cargo can be bought and placed in storage, with a higher sale price locked in on the futures market. In 2009, 100 million barrels of crude were being held at sea, enough to supply Europe for five days, Frontline Ltd., a ship owner, estimated at the time. BP Plc’s earnings were about $500 million more than expected in the first quarter of that year thanks to the trade.

    Brent crude, the international benchmark, has been in contango since July.

    Bulging Inventories

    Traders and governments are stocking up. As many as 297 million barrels, equivalent to half a year of Angolan supplies, could be added to inventories by June, according to the IEA in Paris. Inventories could reach storage capacity within Organization of Economic Cooperation and Development countries by midyear, the IEA estimated Dec. 12. Record numbers of VLCCs were seen sailing to China in December, amid what the IEA said were signs the country was adding to its stockpile.

    Land-based storage outside the U.S. is “getting pretty full” and not all traders have access to these tanks, Richard Mallinson, a geopolitical analyst at Energy Aspects in London, said by phone Jan. 7. Floating facilities may become more attractive in the first half of the year if seasonal weakening of oil demand causes the contango to steepen, he said.

    High shipping rates may keep the trade from becoming profitable, according to Petromatrix, a Zug, Switzerland-based researcher. When floating storage peaked in 2009, freight rates had fallen to 82 cents a barrel on the benchmark Persian Gulf-to-Japan route, according to data compiled by Bloomberg. Demand for oil tankers is stronger today, with per-barrel freight costs at $2.22.

    Too Expensive

    “The front contango in Brent is increasing, but VLCC freight is currently very expensive,” Petromatrix wrote in a report on Jan. 7. “We are therefore not convinced that floating storage is today a better option.”

    The combined value of global oil and gas stocks fell from $4 trillion in June to about $3 trillion currently as the crude price slumped, according to data compiled by Bloomberg. Russia, the world’s largest energy exporter, saw its currency slump 46 percent against the dollar in 2014 while the dollar had its best year since at least 2005, gaining against all 31 major peers.

    Rates for VLCCs, the largest tankers, will average $35,000 a day this year according to the average of six analysts surveyed by Bloomberg. That would be the highest since 2010, data from shipbroker Clarkson Plc show. An increase in seaborne storage might push rates even higher, Erik Stavseth, an analyst at Arctic Securities ASA in Oslo, said by phone on Jan. 6.

    “It’s looking increasingly attractive,” he said. “Floating storage is going to happen in the first quarter.”

  • mikeyhorsehead by mikeyhorsehead Jan 7, 2015 11:17 AM Flag

    Why Dry bulk shipping stocks jumped ? – Frontline Ltd (NYSE:FRO), Scorpio Bulkers Inc (SALT), Nordic American Tankers Limited (NYSE:NAT), Tsakos Energy Navigation (TNP)
    by Rebekah Denny / January 7, 2015

    Frontline Ltd (NYSE:FRO) soared 23.44%, leading gains in shipping industry, after the stock was mentioned on CNBC Fast Money as a leveraged play in the shipping sector. Karen Finerman thinks Frontline will make its next debt payment.

    Several other industry players made gains after Global Hunter Securities initiated coverage on bulk shipping. Analyst Charles Rupinski said he sees opportunity despite “choppy waters.” Coverage was initiated on three sub-sectors of the bulk shipping — tankers, dry bulk and LPG.

    “In a volatile period for the group, we are on the lookout for opportunities, but we do note that while the companies under coverage have varying risk characteristics, we consider the bulk sector as a whole to be speculative in nature,” said Rupinski.

    “For the dry bulk sector, which has seen stock prices retreat dramatically over the last six months, we are initiating coverage of Baltic Trading Ltd (NYSE:BALT), Scorpio Bulkers Inc (NYSE:SALT) and Star Bulk Carriers Corp. (NASDAQ:SBLK) with Speculative Buy ratings. In our view, the dry bulk sector faces continued headwinds in 1H:15, but a combination of low valuation levels and what we believe to be the potential for an increase in capacity removal make it possible for an investor with a tolerance for risk to go long in these names, in our view,” said the analyst.

    “In tankers, we believe the crude tanker segment has the best supply/demand fundamentals of the bulk shipping group, and we initiate coverage of DHT Holdings, Inc. (NYSE:DHT), Navios Maritime Acquisition Corporation (NYSE:NNA), Nordic American Tankers Limited (NYSE:NAT) and Tsakos Energy Navigation Ltd. (NYSE:TNP) with Buy ratings. We have a more conservative view on product tankers, but we expect a solid rate environment,” he continued. “We initiate on the pure play product tanker company Scorpio Tankers Inc. (NASDAQ:STNG) with an Accumulate rating.”

    Rupinski added, “For the LPG segment, it has somewhat limited visibility due to commodity price expectations over the medium term but has traditionally been less volatile than other bulk markets. That said, we are initiating coverage of Stealthgas Inc. (Nasdaq: GASS) with a Speculative Buy rating and Navigator Holdings Ltd. (Nasdaq: NVGS) with an Accumulate rating.”

    Among others, Navios Maritime Partners L.P. (NYSE:NMM), Knightsbridge Shipping Ltd (NASDAQ:VLCCF) and Navios Maritime Holdings Inc. (NYSE:NM) closed higher after the analyst note.

  • ATLANTA, Jan. 2, 2015 /PRNewswire/ -- RPC, Inc. (NYSE: RES) announced today that during the fourth quarter of 2014 it purchased 2,052,984 shares under its share repurchase program.

    RPC provides a broad range of specialized oilfield services and equipment primarily to independent and major oilfield companies engaged in the exploration, production and development of oil and gas properties throughout the United States, including the Gulf of Mexico, mid-continent, southwest, Appalachian and Rocky Mountain regions, and in selected international markets.

  • mikeyhorsehead by mikeyhorsehead Dec 27, 2014 7:01 AM Flag

    The Case for Arris
    For those put off by high valuations, there are still cheap stocks worth buying. One of them is Arris Group (ticker: ARRS), a mid-cap equipment maker for cable and telecom companies. Arris has managed to increase profit an average 13% a year over the past eight years, which makes Arris’ current P/E of 10.8—on 2015 earnings—look cheap. This year, earnings per share are set to grow 56%, before moderating next year.

    Arris sells to the biggest names in pay-TV and broadband. AT&T (T), Verizon Communications (VZ), Comcast (CMCSA), Time Warner (TWX), and Charter Communications (CHTR) make up roughly 50% of the company’s revenue, which is likely to total $5.3 billion this year, up 47%. Sales are boosted by a well-timed acquisition of Motorola’s home segment, which makes cables boxes. Arris bought the unit from Google (GOOGL) in 2013 for $2.4 billion.

    The knock on Arris is that its big customers—in particular, AT&T—are cutting back on capital expenditures. The industry is also going through a well-known consolidation phase, which could reduce Arris’ customer count. Even so, Arris still wins. It makes in-home modems and set-top boxes, as well as enterprise routers, which route traffic around neighborhoods. The products play a crucial role in improving broadband speeds and video service.

    The stock is also hampered by the continuing debate about cord-cutting. Skeptics see an inevitable decline in subscriber rolls for pay-TV providers, with so-called over-the-top Internet streams replacing costly cable packages. Comcast, though, continues to post impressive results, even with small declines in video subscribers.

    And the competition has actually made Comcast a better operator. Eighteen months ago, the head of Comcast’s cable business told Barron’s, “We’ve disrupted ourselves so we can innovate faster” (see “Don’t Touch That Dial,” Cover Story, Aug. 5, 2013).

    The company’s latest television service, called X1, takes the best of Netflix ’s interface and combines it with Comcast’s far broader offerings. Comcast says its X1 customers are now less likely to cancel service, and they watch 20% more video on demand. In the fight against Netflix and the Internet, X1 has been cable’s greatest success.

    Arris makes the sophisticated set-top boxes that run X1 in consumers’ homes. “They are the prime arms merchant in the battle against disintermediation,” says Todd Mitchell, an analyst at Brean Capital. “Comcast is the first out of the gate, but everybody is putting these infrastructures in place. Nobody is going to be a dumb pipe.”

    Mitchell, who covers digital media, recently named Arris a top pick for 2015. He has a price target of $36 on the stock, 18% above Friday’s close of $30.46.

    He argues that investors haven’t given the company credit for its role in helping the pay-TV industry finally catch up with technology.

    “If you think about all the things we hated as consumers about set-top boxes, it had to do with the fact that the software was native on the box. It couldn’t be changed,” Mitchell says. Now Arris-powered boxes are running the Internet, which means TV guides can be updated on the fly, while pushing slick apps to your TV.

    The cable industry is already paying up for Arris’ technology. Eventually, investors will, too.

    -- A.E.

  • Reply to


    by trubulator12345 Dec 22, 2014 11:25 AM
    mikeyhorsehead mikeyhorsehead Dec 22, 2014 11:50 AM Flag

    Somebody was selling shares last week. No? :)

  • Reply to


    by trubulator12345 Dec 22, 2014 11:25 AM
    mikeyhorsehead mikeyhorsehead Dec 22, 2014 11:31 AM Flag

    Folks taking loss for the year would be my guess.

  • Reply to

    Rights offering.........

    by davenot69 Dec 16, 2014 10:46 AM
    mikeyhorsehead mikeyhorsehead Dec 16, 2014 2:35 PM Flag

    I called E*trade; they said everything has yet to be finalized, that it should be 'soon'. It will be necessary to call broker in order to accept offering.

  • mikeyhorsehead by mikeyhorsehead Dec 15, 2014 11:36 AM Flag

    Rally in waiting
    Clarksons Capital Markets has tipped dry cargo shares for a strong bounce the next time the spot market shows signs of life.

    Analyst Omar Nokta says bulker owners' paper is down 65% on average this year given the “overwhelmingly negative” sentiment in the physical and futures markets right now.

    Stocks are trading below even the trough net asset values seen at the bottom of the market in early 2013, the analyst says.

    “This sets up for a significant rally in the stocks on the next occasion freight rates bounce, in our view,” Nokta said in a weekly note to investors.

    Clarksons Capital is charting for bulker fleet utilisation of below 80% in 2015 and 2016, with a “major improvement” due in 2017, the report said.

    The note of optimism on the stocks came amid continued pain in the market Monday with dry rates now down for 17 successive trading sessions.

    Earnings in each core asset class are reading below $10,000 daily today with the Baltic Dry Index at just 845 points.

    One the core iron ore route from Australia to China BHP paid just $5.05 per tonne for a Zosco vessel today.

    As TradeWinds reported on Friday, Nokta has identified a handful of “interesting investment opportunities”.

    Nokta stamped Diana Shipping with a “buy” rating but changed his recommendation for Star Bulk Carriers and Knightsbridge Shipping to “hold”.

  • Reply to

    A Smoother Ride for Tankers

    by mikeyhorsehead Dec 15, 2014 6:42 AM
    mikeyhorsehead mikeyhorsehead Dec 15, 2014 6:50 AM Flag

    writes Anthony Gurnee, CEO of shipper Ardmore Shipping (ticker: ASC).

    As volatility in oil prices has increased, some traders have even hired tankers to transport fuel products as they take advantage of the difference in prices in different markets, Gurnee says. “Traders appear to be engaging tankers in longer and more complex voyages to take advantage of price arbitrage, and in some cases using them unofficially for floating storage, meaning that they arrive and have to wait a long time to discharge as shore tanks are full or the cargo has not yet been sold.”

    Investors, however, have not bought into the story yet. Their wariness is influenced by several factors: The selloff in oil has made any stock connected to the industry appear dangerous; the stocks are small and often lightly traded; and the tanker industry has often proved to be an undisciplined group of companies.

    In the past, shipping companies have tended to expand fleets rapidly in good years, leading to overcapacity and falling rates. But the number of oil tankers is up less than 1% this year and is expected to rise less than 2% next year, according to Chappell. Tankers ordered today won’t show up until 2017, so the supply-demand balance could persist for multiple years.

    That dynamic makes the stocks ripe for picking, say some investors. “We’re at an inflection point,” says John Reardon, a managing director at Merriman Capital, who likes several tanker stocks. “There’s going to be a massive move in the group.”

    Ardmore, a $262 million (market value) tanker company that ships refined products, looks like a good bet at these prices. After posting losses for the past two years, Ardmore is set to earn five cents this year and 82 cents in 2015. Its shares, at $10.13, trade at 13 times forward earnings expectations, a discount to its peers and its historical average.

    Another stock with strong fundamentals and an appealing valuation is Teekay Tankers (TNK), which ships both crude and oil products. Teekay closed Friday at $5.35, up 15% on Friday alone, amid news of oil stockpiling in China. Even so, it trades at just 8.9 times forward earnings, and analysts expect the company to more than double its earnings per share next year.

  • mikeyhorsehead by mikeyhorsehead Dec 15, 2014 6:42 AM Flag

    Via: Barron's

    The broad selloff in energy stocks has taken down virtually every oil-related stock. But one industry seems to have been unduly punished. Oil-tanker stocks have sunk along with oil, falling 10% as a group in the past six months.

    Investors and insiders say the industry is fundamentally healthier than it has been in years. Shipping rates are on the upswing, and fuel costs—the tankers’ largest expense—continue to decline.

    Rates for tankers carrying crude oil have risen 23% since mid-October, and those carrying refined products like gasoline are up 36% over that period. Supertankers known as VLCCs, for very large crude carriers, are renting for $77,000 a day for individual voyages, up from $35,000 a year ago, says Evercore ISI analyst Jonathan Chappell. And the cost of fuel for shippers is down 40% from 2013.

    This sudden strength might seem counterintuitive, given the drop in the price of oil. But oil’s current weakness has more to do with oversupply of the commodity than with weak demand. With demand continuing to rise, albeit at a less rapid rate than in previous years, the need for tankers remains robust.

    Demand for oil tankers has risen for several reasons. China has been stockpiling cheap oil to shore up its petroleum reserves. And the surge in oil supply out of North America has opened up new shipping routes. Venezuela, for instance, has shifted more oil exports to China because the U.S. doesn’t need as much of its oil, and longer routes are lucrative for tanker companies. New refineries in the Middle East should also open up longer shipping routes as oil products must travel farther to reach consumers.

    In addition, the glut in oil has led to delays in moving refined products, which just means more work for some ships—it “uses up ship time, and we get paid for that, too, at the same rate as the voyage,” writes Anthony Gurnee, CEO of shipper Ardmore S

  • Weitz Partners Value Investor fund is willing to reconsider stocks if they have compelling stories.

    Let’s hear about a few of the stocks in your portfolio.

    Weitz: Liberty Media [LMCA] is what we refer to as the mother ship of the Liberty complex. It is a holding company that’s a collection of various public and private businesses, including the Atlanta Braves Major League Baseball team. But 80% of the gross asset value is Sirius XM Holdings [SIRI]. Liberty got those shares by making a loan to SiriusXM when it was in distress during the financial crisis. Facing bankruptcy, SiriusXM had taken on way too much debt. The two companies, Sirius and XM, had merged, so they had a monopoly on satellite radio. Liberty lent them about $500 million at a very high interest rate, and took an equity kicker convertible into 40% of the company. SiriusXM got over the hump with that loan, and paid it back quickly. So, virtually for free, Liberty got 40% of the company, which now has a market cap of $19 billion.

    What’s going to drive this stock higher?

    Weitz: The other assets besides SiriusXM have some value, but we don’t need to focus on those. The Sirius story is that it is a subscription business. That’s the hallmark of Liberty’s businesses, and we always like subscription businesses, which have recurring revenue. Sirius is increasing its subscribers. The car companies install the radios in most of the new cars, and then the buyer typically gets six months of free use. And then most of them start paying. So there are more cars and more subscribers, and they are finding ways to get people who are buying used cars to re-up for the satellite-radio service.

    As a result of all of this, there’s a growing stream of free cash flow of more than $1 billion a year. And there really aren’t very many reinvestment opportunities for that money. So I expect them to gradually follow the typical Liberty playbook—that is, keeping the company moderately leveraged and using the cash flow to buy back shares. That would boost the value of the shares. Sirius trades in the open market for about $3.50 a share. Based on our valuation of Sirius, the private-market value is about $4.50. If you value it at $4.50 and then add in the Atlanta Braves and the other assets, you get to about $50 a share for Liberty Media, versus the recent price of $35.

    You’ve done a lot of investing in cable companies over the years, so what’s your case for Liberty Broadband [LBRDK].

    Weitz: The company consists of a 26% stake in Charter Communications [CHTR], among other assets. That stake in Charter Communications was recently spun out of Liberty Media. Charter was a collection of cable companies that took on too much debt and filed for bankruptcy protection in 2009. Charter subsequently came out of bankruptcy, and Thomas Rutledge, formerly the chief operating officer at Cablevision Systems [CVC], came over in 2012 to manage the company. He is a great manager, who is really shaping up their systems. There was a private-equity owner of 26% of the company, and that stake was sold to Liberty Media. The focus is on broadband. Liberty Media recently spun out broadband operations from the mother ship. The thinking is that Liberty could buy cable systems independently of Charter or could work with Charter to buy cable systems. In the meantime, Comcast [CMCSA] is taking over Time Warner Cable [TWC], and Comcast has to divest some subscribers. So they’ve made a deal with Charter that essentially doubles the size of Charter.

    What is Liberty Broadband’s strategy?

    Weitz: I’m expecting Liberty Broadband to use its cash to buy other cable systems. They will help Charter get bigger, and eventually one of the options they’ll have is to collapse Liberty Broadband into Charter, presumably setting up a tax-efficient exit. It might take two years, it might take five. The timing doesn’t really matter to us. You have John Malone, the chairman of Liberty Media, managing assets and cash, and he’s maximizing the value for you. Ultimately, this is a play on the consolidation of the cable industry. Liberty Broadband’s stock has been moving up since it was spun out in November. So it is not especially cheap, compared with just owning Charter directly. But as I said, you have John Malone creating value. We feel that Charter is worth more than it is selling for, most recently at $164, and if you put our private market value on the Charter shares, we get about $58 for Liberty Broadband, versus $51 recently. But the stock has been creeping up a bit.

  • in a transaction that occurred on Tuesday, December 9th. The shares were purchased at an average price of $12.21 per share, with a total value of $8,124,534.00. Following the completion of the transaction, the director now directly owns 4,465,395 shares of the company’s stock, valued at approximately $54,522,473. The transaction was disclosed in a document filed with the SEC.

  • Reply to

    Tanker sell-off makes no sense

    by trubulator12345 Dec 8, 2014 9:34 PM
    mikeyhorsehead mikeyhorsehead Dec 9, 2014 11:12 AM Flag

    Teekay Tankers ascending. NAA not so much.

  • MONACO--(Marketwired - Dec 3, 2014) - Navios Maritime Acquisition Corporation ("Navios Acquisition") (NYSE: NNA), an owner and operator of tanker vessels, announced today that its Board of Directors has authorized a share repurchase program for up to $50.0 million of Navios Acquisition's common stock, within two years. Share repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program will be determined by management based upon market conditions and other factors. Purchases may be made pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act. The program does not require any minimum purchase or any specific number or amount of shares and may be suspended or reinstated at any time in Navios Acquisition's discretion and without notice. The Board will review the program periodically. Repurchases will be subject to restrictions under our credit facilities and indenture.

5.14-0.33(-6.03%)Jan 30 4:04 PMEST

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