jessieqwert
Senior member
- Jun 21, 2003
- 955
- 1
- 81
Arachnotronic
Lifer
- Mar 10, 2006
- 11,715
- 2,012
- 126
+ declining demand for overseas trade.
Total Cash = $45M
Total Debt = $254M
Total Debt/Equity = 51.8
Highly leveraged and the book value is high most likely due to overvalued ships. You make a good point.
Buy low, right? Maybe they will survive and maybe not. This does not seem to be a good time to buy.
Greek shipping companies are trading very low but I think they will be dead for quite some time as Chinese and Korean ship builders are flooding the supply with new ships while global demand is stagnant. Companies with low utilization rates, high debt, incompetent financial engineering experience and lack of long term contracts will be especially hurt as shipping rates continue to wane although we did see a recent bounce but back to decline. This is not to mention how there's a small fiscal problem in Greece causing investors to stay away D:
That's not bottom fishing.
Bottom fishing would paying at or below(0.85 to be safe) tangible book for it.
RIMM's tangible book value is about $12.60/share.
The only thing I don't understand is why many shipping companies continued to buy up ships in the midst of a supply shock as well as dwindling global demand other than to build capacity as a revenue multiplier but at the same time if there's little demand and the ships themselves depreciate, why waste capital now? For the sake of creating larger break even cash flow? There's a huge risk in that don't you think? Unless there's something we don't know.
Imp
Lifer
- Feb 8, 2000
- 18,828
- 184
- 106
Speaking of inventory:
http://www.theglobeandmail.com/glob...ng-could-crimp-future-results/article2244022/
Major increase in inventory for phones and Playbook.
General Notes
In November, before the holiday season and the end of the year, the market typically drops a bit as people sell for a loss for tax deductions and to pay for the holiday. Add in our recent gloomy weather that hangs overhead in a depressive manner, along with pressure swings that cause anxious behavior.
This provides some understanding for the current market drop with hopeful resurgence in the second and third week of March as the weather improves. Except for isolated cases, purchases now will most likely be held for a few months.
Some stocks I am watching:
Hard Drive Manufacturers
OCZ - Possible SSD holiday sales profits
STX, Seagate
WDC, Western Digital
I want to see how Seagate and Western Digital take the opportunity provided by the flood to rebuild for future storage products.
SGI, Silicon Graphics - has broad swings with the market due to overspeculation. I see anything under $13.50 to be a buy opportunity.
VCO, Vina Concho i Toro Wine - Chile, excellent and low cost red wine with a stable company. Below $37 is a possible buy opportunity. I keep waiting for $32.
GLW, Corning Glassware - Gorilla glass (tm)
Not sure why I am looking at these.
CIM, Chimera Mortgage REIT - Recently purchased 6k shares for dividends, price has dropped since and is risky. Possibly a poor decision. I hate risk. What am I doing here? I like the idea of dividends to pay for one month's rent each quarter.
PRGN, Paragon Shipping - Possible bounce back from unrealized market fears? I must be nuts for considering this sinking stone. Might as well put my feet into a bucket of wet cement now and set me adrift to plunge to the briny deep and rest in Davy Jones' Locker.
EDIT: s/Argentina/Chile/
I am clearly not able to focus on the details.
In November, before the holiday season and the end of the year, the market typically drops a bit as people sell for a loss for tax deductions and to pay for the holiday. Add in our recent gloomy weather that hangs overhead in a depressive manner, along with pressure swings that cause anxious behavior.
This provides some understanding for the current market drop with hopeful resurgence in the second and third week of March as the weather improves. Except for isolated cases, purchases now will most likely be held for a few months.
Some stocks I am watching:
Hard Drive Manufacturers
OCZ - Possible SSD holiday sales profits
STX, Seagate
WDC, Western Digital
I want to see how Seagate and Western Digital take the opportunity provided by the flood to rebuild for future storage products.
SGI, Silicon Graphics - has broad swings with the market due to overspeculation. I see anything under $13.50 to be a buy opportunity.
VCO, Vina Concho i Toro Wine - Chile, excellent and low cost red wine with a stable company. Below $37 is a possible buy opportunity. I keep waiting for $32.
GLW, Corning Glassware - Gorilla glass (tm)
Not sure why I am looking at these.
CIM, Chimera Mortgage REIT - Recently purchased 6k shares for dividends, price has dropped since and is risky. Possibly a poor decision. I hate risk. What am I doing here? I like the idea of dividends to pay for one month's rent each quarter.
PRGN, Paragon Shipping - Possible bounce back from unrealized market fears? I must be nuts for considering this sinking stone. Might as well put my feet into a bucket of wet cement now and set me adrift to plunge to the briny deep and rest in Davy Jones' Locker.
EDIT: s/Argentina/Chile/
I am clearly not able to focus on the details.
Last edited:
A drastic thought involves the possibility of a global war due to global recession, in which case those ships will be extremely valuable.
Other than that hopefully non-existant possibility, I agree with you completely.
I agree, last I checked they're yielding close to 4%. Wish I had picked some up in August when it dipped below 20.
Now granted they're way behind in the handheld space, but PC growth is conservatively expected to still be 5% YoY for the next several years. IDC & Gartner actually project higher than 5% but they're consistently wrong even in the short term. I suppose the biggest risk is if ARM-64 wiggles into the server room.
War? With the US involved?? Chance in a million!
Actually I'm an idiot because I knew the answer all along.
So bankruptcies are occurring in the shipping industry which means that the ships owned by the bankrupcies are returned back to their financiers, aka the banks. Large supply means ships have to be sold at a low cost. This means ships are available through the banks at discounted rates so shipping companies with healthy credit ratings can finance ships at a low cost. However borrowing rates in EU nations are umm..rising..dramatically..thanks to a few PIIGS.
So what is a competitive company stuck in the shipping sector to do in a case like this? Of course, buy a sh!tload of ships at low prices and operate all of them at low cost in order to cheaply invest in growth and survive. Doing this also forces the company to operate very efficiently which easily translates into future growth leverage which eventually translates to greater shareholder value. YEEAAAAHHHHHH!!!!!
Supply to demand ratio may be slim now but eventually when things do improve, in retrospect it may be the cheapest industry to invest in today but obviously things could be rough until things are smoothed out. Buy low and sell high right?
Pliablemoose
Lifer
- Oct 11, 1999
- 25,195
- 0
- 56
In and out of GMCR, 2500 shares 53.64 and 54.49.
Still playing hit and run with stocks for now, hoping Europe settles down.
Still playing hit and run with stocks for now, hoping Europe settles down.
That is a nice analysis. I would not have picked up on the bankrupt companies selling off their ships and the rising credit rates. If you were testing me, I failed.
I read somewhere that DryShips recently purchased two ships from Paragon.
How many years will it take to regain demand? Minimum four, probably ten. (unresearched assumption!) By ten years from now, those ships will be old.
The list of companies related to Paragon and Dry Ships in Google Finance show share price drops for all the companies. Not a single company has increased their share value over the last year. Definitely low demand with the potential for long term future gains if the company can survive. Right now, Paragon is priced so low another company may consider purchasing or merging with them.
When times get tough, companies merge. When times are going well, companies split. I see Paragon ripe for takeover, if someone wanted to assume their $209M debt. (debt - cash = $254M - $45M = $209M debt) Dry Ships will not purchase Paragon, not after purchasing two ships.
Paragon mentioned paying off non-repetitive debt this quarter with expectations for positive earnings next quarter. Analyst estimates expect a loss of $-0.18/share for next year.
They may be a future possibility but appear not to be a purchase opportunity now. Additionally, the share price still has a negative slope. I would like to see the share price hit bottom first.
I read somewhere that DryShips recently purchased two ships from Paragon.
How many years will it take to regain demand? Minimum four, probably ten. (unresearched assumption!) By ten years from now, those ships will be old.
The list of companies related to Paragon and Dry Ships in Google Finance show share price drops for all the companies. Not a single company has increased their share value over the last year. Definitely low demand with the potential for long term future gains if the company can survive. Right now, Paragon is priced so low another company may consider purchasing or merging with them.
When times get tough, companies merge. When times are going well, companies split. I see Paragon ripe for takeover, if someone wanted to assume their $209M debt. (debt - cash = $254M - $45M = $209M debt) Dry Ships will not purchase Paragon, not after purchasing two ships.
Paragon mentioned paying off non-repetitive debt this quarter with expectations for positive earnings next quarter. Analyst estimates expect a loss of $-0.18/share for next year.
They may be a future possibility but appear not to be a purchase opportunity now. Additionally, the share price still has a negative slope. I would like to see the share price hit bottom first.
It's impossible to pick a bottom, especially with something as volatile as shipping...or anything for that matter. It's also pretty hard to analyze serviceability of debt and with shipping companies, they're all a bit sketchy and heavily indebted.
At this point in the grand scheme of things, countries are deleveraging which means that currencies must go up and equities stagnant or drop creating an attractive buying condition. I've been predicting for many months now that QE3 or whatever won't actually happen but there's no doubt that the Fed's money printing will show it's inflationary effect over the coming years so if there's a dip in equities again, it may not be such a bad idea to buy.
The obvious investment IMO? Think about how you as a regular Joe consumer is feeling the squeeze of inflation with stagnant income growth and a dire need to save money in case the sh!t hits the fan. It's not rocket science to know that people would flock to large discount shops where they can get everything they need in one shot to save on gasoline costs etc. Perhaps a large discount shop where they can buy groceries, pharmaceuticals, household goods, basic financial and medical services that is opening new stores, especially in nations with growing middle class population?
At this point in the grand scheme of things, countries are deleveraging which means that currencies must go up and equities stagnant or drop creating an attractive buying condition. I've been predicting for many months now that QE3 or whatever won't actually happen but there's no doubt that the Fed's money printing will show it's inflationary effect over the coming years so if there's a dip in equities again, it may not be such a bad idea to buy.
The obvious investment IMO? Think about how you as a regular Joe consumer is feeling the squeeze of inflation with stagnant income growth and a dire need to save money in case the sh!t hits the fan. It's not rocket science to know that people would flock to large discount shops where they can get everything they need in one shot to save on gasoline costs etc. Perhaps a large discount shop where they can buy groceries, pharmaceuticals, household goods, basic financial and medical services that is opening new stores, especially in nations with growing middle class population?
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- Sep 29, 2004
- 18,656
- 68
- 91
Juut noticed, GE is under $15. Hard to value it though. I think it is cheap at $15 though.
By hard to value, I should add, don't ask me for my rational.
By hard to value, I should add, don't ask me for my rational.
KB
Diamond Member
- Nov 8, 1999
- 5,406
- 389
- 126
I have been bullish on GE and continue to move in and out of the stock. Sadly it isn't in favor of most stock holders. Some people find it a complicated company; however I find its diversification to be a strength as some business units can make up for others that are struggling. For example the renewable energy sectors are doing poorly while the jet aircraft engine sector is doing well.
Right now it is paying a 4 percent dividend, with a stated goal of increasing it. It has $8 of cash per share on hand. Although its current earnings growth is weak, its main revenue source in 2007, GE Capital, has yet to start paying divdends to the parent company. When it does this, they should be passed on to the shareholders. It has loads of cash on foreign soil and if congress ever passes the 5% repatrioted tax provision they will bring a lot of this money back.
I like it at $14 though as the market continues to fall.
- Sep 29, 2004
- 18,656
- 68
- 91
Keeping an eye on:
SWY
GE
ABH
Any of them fall about $1 more and I'm buying. Glad to have a little cash for once. Still regretting not sellign a bunch of stock 1-2 weeks ago though.
SWY
GE
ABH
Any of them fall about $1 more and I'm buying. Glad to have a little cash for once. Still regretting not sellign a bunch of stock 1-2 weeks ago though.
Jeffg010
Diamond Member
- Feb 22, 2008
- 3,435
- 1
- 0
Well that did not take long.
Groupon, Inc. (GRPN)
http://finance.yahoo.com/news/Groupon-shares-sink-20-IPO-rb-3333908750.html?x=0&l=1
Groupon, Inc. (GRPN)
http://finance.yahoo.com/news/Groupon-shares-sink-20-IPO-rb-3333908750.html?x=0&l=1
Hugo Drax
Diamond Member
- Nov 20, 2011
- 5,647
- 47
- 91
Interestingly enough the VIX is at 33.34 which seems under for the level of turmoil. It would typically price at 35-36
Unless of course they are expecting this is a short term bottom on the general markets or it will trade sideways for the next month or so.
Unless of course they are expecting this is a short term bottom on the general markets or it will trade sideways for the next month or so.
- Sep 29, 2004
- 18,656
- 68
- 91
Well, atelast there was time for people with mutual funds in retirement accounts to buy GRPN unknowingly. Thank goodness they were able to fund the wealth generation of the IPO insiders. Good for them!
Phwatttt: trading near $17/share.
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