E*Trade, for one, is raising the margin requirement for NNA to 60% from 25%. Not sure why now that this stock is vastly LESS risky than it has been for the past two years. Takes effect March 12th. Would be good to know if this is happening at other brokerages and with other stocks. Anybody?
It was upgraded 2 days ago, to buy, pt $6 by DNB Markets. DNB stands for Den Norsk Bank. It's a Norwegian Bank. The Norwegians know d**k about shipping, so probably best to ignore...
No meaningful change in the Baltic Dirty Tanker Index...what indices do you mean?
Probably a combo of FRNT's comments, DNB's upgrade, Seeking Alpha article and SFL's earnings call comments = 2014 bullish for tankers.
Assume you are referring to the late day pop? Who knows, but it is to be expected that they will announce something as to how they will deploy that new slug of @$50mm in equity capital. I think we'll know something within 2 months at latest, likely sooner. My hope is that it is a huge commitment to that JV and another sweetheart deal with HSH for beaucoups vessels.
Don't forget we'll have a new comparable in Diamond S when it comes public here in short order. The publicity and the metrics of this WL Ross-associated owner will be good for NNA's visibility.
I think you're both right, they're plugging holes but they have a vision of what they want to do with this company and what opportunities they want to take advantage of, and companies are not generally in control of when/how they can tap the capital markets. The golden rule is, if you think you might need the money, you take the money when it's available whether you need it or not.
I don't like dilution but what you are getting here is responsible but aggressive growth. I'd rather be diluted 10% and have the company be 2x as large ultimately.
Has to be since AF just told us that capex is fully funded and debt maturities are well in hand. My hope is that this gets plowed big time into expanding that JV that picks up busted HSH deals.
Back in 2012, I said $120mm EBITDA this year and was right. I'm saying $150mm EBITDA this year, $180mm in 2015 and $220mm in 2016. I apply a traditional 9x EV/EBITDA multiple, which I think is conservative in an improving shipping market and appropriate to NNA's low risk model. That implies the stock should be over $5 as we get closer to 2015. It all depends on how quickly Mr. Market wants to get us there. IMO, it'll be quickly. The stock is worth $7 as we look into 2016, which should be Q1-mid 2015.
Yes, indeed, the potential ROE is off the charts but it's not really worth it unless you can scale it. I'd like to see 20-25 more vessels thrown into this JV. If it works, you could spin it off as a major shipping co in its own right. Home run for shareholders of NM and NNA. The tricky thing here is with a recovery looking more likely, does the bank want to cede much more upside to Navios...?
Couple things: 1) the ships' FMV is currently depressed by the state of the market, it should be expected that their value will rise as the shipping market improves. 2) As a trade-off for paying over market, the NNA/NM JV gets to pony up a ridiculously small amount of equity, 3) the sub loan has extremely flexible payback provisions - the loan gets paid back when $ is available, not some predetermined schedule. Alot of the loan value is contingent on things going well, the $300mm is not a hard $300, but a soft one.
This deal gives both parties what they want, it gives Navios massive ROE potential and a flexible operating model, and it gives the bank a chance to salvage a bad loan by recognizing greater value now via the compensation over FMV.
We have just been through three years where many classes of ships didn't make a dime, VLCCs in fact lost money carrying cargoes. So you can forgive the market for wanting more certainty as to whether all these available days stand a chance of being profitable. With large %s of each fleet on order (22% for MRs) this is still an open question. The stock will rise on actual financial results, I don't see shipping trading on hope for the next few years - been there done that (See DRYS, 2007-2010). Shipping will trade on less than 12 month cash earnings forecasts.
standard. slightly better than b/e to bide time for the upswing, plus profit sharing. more of AF's low risk strategy. fine by me. These charters actually replace some of the much higher profit sharing hurdles of the first batch of VLCCs and lower the p/s hurdle rate for the VLCC fleet in aggregate, which creates more operating leverage to a market recovery. Again, fine by me.
Capital Link gives out a free report that is useful. Yes, our money is still in the right place, we are still not even near seeing the financial impact of 14,000 available days. We'll be well over a $200MM EBITDA run rate going into 2016. The shale boom is not to worry, in fact, long term it helps us but cementing the dominance of the hydrocarbon-based economy for the next 50 years. Overordering, like STNG has done, is the worry. Still, NNA is not a risk player, if we can get $20-25k per day for our tankers starting in the next year or so for multiple years to credits like Shell, we'll all do incredibly well.
TNK fixed (somewhat) what was broken, thus the big pop. Long term shareholders are still not doing great, but if you timed it well you did well. Bigger gains from here in TNK should be difficult. NNA has never been broken, so no commensurate pops to be had - it's a lower risk/lower reward model. High risk stocks have been carrying the day recently, but this will abate and interest will flow back into the steady players like NNA.
To be fair, the loans for the VLCCs were done when Bjorn Mueller was still there. Maybe BM was checked out and Chan was running things, but I don't think it was ALL Chan. And no way any Teekay entity buys boats without Evensen intimately involved. Chan didn't blow it single-handedly, he just didn't inspire confidence and the market wrote him off.
Investors are picking up shares in the companies that have the highest operational leverage to a recovery in shipping. These are spot market players, the financially distressed and those with speculative ships on order. SFL has a low risk/low reward model so it does not have high operational leverage. Plus almost half the business is rigs, which has nothing to do with a shipping recovery. Once all the counterparty risk is demonstrably behind SFL, the shares should adjust to around a 6-8% div yield implying $19.5-$22 price tag.
This is correct. As well, SFL reports numbers using "lease finance accounting" which distorts true economic earnings into GAAP earnings. It also distorts shareholder's equity which makes the company look more leveraged than it is. I've owned SFL since 2004, trust me, the numbers are complicated. If you are looking at standard EPS and P/E, you are off base.