the key takeaway from their earnings is that they expect significant improvements in spot rates due in part to the supply of ships being less than demand, which is growing a lot.
kem - what is your target on DRYS? did you see the investor presentation by NMM on dry bulk? pretty positive when you think of 2.5 billion people from india and china consuming grains/iron ore/coal.
The only issue I have with this argument is the shipping companies and banks don't want to go through the same mess they just got out of so my belief is you won't see a spike in supply for many, many years. That should support prices for a lot longer than the consensus 2 years.
isn't the problem with that logic that low valuations don't last forever? when PIR doubled from $0.10 to $0.20 couldn't you have said, "well, it was valued at cash before so it could go back there"....and then it went to $20+.
They're going to be expanding their facilities soon. They said they would on the last call as soon as they get through this Green Fence stuff.
Wouldn't be surprised to see it up a good deal after the impatient people bail. Those were solid earnings and the conference call was positive. They could potentially double earnings over the next 2 years. That would translate into a 7% yield.
If you're looking for another recycling play check out GPRC. They just took a hit because of a week long inspection that shut down their facilities as part of China's Green Fence thing. They've been holding back on expansion until after the new 10 year plan is unveiled. My guess is 2014/15 they will begin growing again. Trades at like 2 times earnings.