3SOF

When TBSI breaks the $23.75 resistance level, it will probably run fast towards $23.75 - $20.3 = $3.45 + $23.75 = $27.2, which would be the technical target of such breakout.

In fundamental terms my valuation model says TBSI should only be sold at $37.75, so I'll keep holding TBSI.

As expected, TBSI broke out of its trading range, to a new all time high. The optimal selling price for TBSI, given by my valuation model, is $37.75, so I'll keep on holding the stock.

The Shipping industry average earnings multiple rose from 13.79 to 14.3, so TBSI's optimal selling price rose from $37.75 to $39.14. With the stock at $24.04 it doesn't cross my mind selling it.

People took losses in many stocks yesterday, so they sold the ones where they had profits to compensate for the losses. TBSI suffered a bit from this phenomenon. But this company's fundamentals are just too attractive, it trades at 8 times estimated 2008 earnings and EPS in Q1 2007 grew 82% from Q1 2006.

I'll keep holding TBSI.

Shipping Industry is taking a beating today!  TBSI is way oversold, I see a nice bounce happening soon.

Quote from: mbaugh on June 07, 2007, 03:25:32 PM
Shipping Industry is taking a beating today!  TBSI is way oversold, I see a nice bounce happening soon.

Yeah, me too. There was too much pressure to take profits yesterday, regardless of the fundamentals, so people sold TBSI in a rage, because many had profits in this one. I don't have a profit, instead a 6% loss, but I see almost a double coming, no effort needed, just patient.

I'll patiently keep holding TBSI, as bulls rest from the previous run.

I know everyone here is worked up about SILC, does anyone else have an opinion on TBSI?  How about Yukii, what's your take on TBSI short-term?  Of all the stocks in the main portfolio, I like TBSI the best.  The only problem is i bought it at $23 and I too am down with this trade.  it seems to be repeating the same pattern the last time we were down, if we can close above 21.07 (today's opening price) then I think we should see a nice reversal towards new highs.  But who know's with the rest of the market this could go lower.  Any thoughts? Thanks.

Mbaugh

I doubled down on it yesterday, so yes I like it.

Quote from: mbaugh on June 08, 2007, 10:57:42 AM
Any thoughts? Thanks.

Hi mbaugh,

TBSI is also one of my favorite picks in 3SOF's portfolio but as always in investing timing is important.

The shipping industry is by nature very cyclical. If the world economy slows down or the market perceives that the world economy will slow down the shipping stocks are among the first to be hit.

Right now there are a lot of fear in the market that increasing interest rates, initiatives in China to slow growth and rising energy costs will slow down the world economy. This combined with record order books for new tonnage makes some investors very worried about shipping stocks. That is why you have what I consider to be ridiculous valuation of shipping stocks.

As some of the old-timers here would know I am bearish on the US economy and therefore the US stock market. I believe that we will see a correction during the summer and unfortunately despite the cheap valuation of shipping stocks I believe they will lead that correction.

As shipping by nature is an international business they are dependent on the world economy and not solely on the US economy and I am much more bullish on the world economy so even though I like TBSI I will sit on the sideline and wait for the correction to come into play (as I have been waiting for a long time  ). That is when I believe you can do a great investment in TBSI and some of the other shipping stocks.

Yukii and Michael, thanks for the comments!

Transportation costs – and can cost a lot. We all know this. We even feel it personally as we shell out that $40, $50, or dare we say $60 for a full tank at the corner service station. We also feel it in the cost of the things we buy – like food and consumer goods – and since Star Trek's transporter is a long way from being a reality, that stuff has got to get from the farm, mine or manufacturer somehow. For coal and iron ore it's by ship.

Recently, the cost of hiring that ship has been rising. And it's not only due to increased operating costs (think fuel). The large capesize ships can carry 175,000 tonne of coal or iron-ore, and China has been using them at record levels. Here's what happened: India, China's closest iron-ore exporter, introduced a new tax on iron-ore exports, leading China to look farther afield for cheaper supplies. These supplies have to be brought in by ship longer distances which has reduced the number of ships available for hire. Once again the laws of supply and demand spring into action and transportation costs rise. They've risen so much that industry officials say that "freight [is] almost expensive as the ore itself".

It's not just coal and iron ore that are effected. With the tight supply of capesize ships, the mid-sized "panamax vessels" are experiencing an increase in demand and their prices have risen too. This trickle down effect could raise prices all down the line, bumping up everything from rice to soybeans. And with China being one of the largest importer of soybeans, we all know which way the ships are headed.

Quote from: yukiii on June 08, 2007, 01:23:14 PM
Recently, the cost of hiring that ship has been rising. And it's not only due to increased operating costs (think fuel). The large capesize ships can carry 175,000 tonne of coal or iron-ore, and China has been using them at record levels. Here's what happened: India, China's closest iron-ore exporter, introduced a new tax on iron-ore exports, leading China to look farther afield for cheaper supplies. These supplies have to be brought in by ship longer distances which has reduced the number of ships available for hire. Once again the laws of supply and demand spring into action and transportation costs rise. They've risen so much that industry officials say that "freight [is] almost expensive as the ore itself".

Hi Yukii

This is the fundamental case for investing in shipping stocks and I believe in this case as well. As you know better than most investing is not only about fundamentals. If you believe that US economy will slow down or the stock market will go through a correction DJ transport will be the first index to fall (As we have just seen). Professional investors know this and that is why they at the end of a bull run put a very low valuation on transport stocks. Some of these stocks pay a 12% dividend but they have still been trading down the last couple of days  .

In a situation with so much uncertainty as now I would prefer (that is if I was in the market) to have more defensive stocks.

If on the other hand you strongly believe that this bull run will continue then shipping could be a great investment. It is all about sentiment and risk and right now a feel that these two factors do not favor transport stocks 

Quote from: Michael on June 08, 2007, 01:49:31 PM

Quote from: yukiii on June 08, 2007, 01:23:14 PM
Recently, the cost of hiring that ship has been rising. And it's not only due to increased operating costs (think fuel). The large capesize ships can carry 175,000 tonne of coal or iron-ore, and China has been using them at record levels. Here's what happened: India, China's closest iron-ore exporter, introduced a new tax on iron-ore exports, leading China to look farther afield for cheaper supplies. These supplies have to be brought in by ship longer distances which has reduced the number of ships available for hire. Once again the laws of supply and demand spring into action and transportation costs rise. They've risen so much that industry officials say that "freight [is] almost expensive as the ore itself".

Hi Yukii

This is the fundamental case for investing in shipping stocks and I believe in this case as well. As you know better than most investing is not only about fundamentals. If you believe that US economy will slow down or the stock market will go through a correction DJ transport will be the first index to fall (As we have just seen). Professional investors know this and that is why they at the end of a bull run put a very low valuation on transport stocks. Some of these stocks pay a 12% dividend but they have still been trading down the last couple of days  .

In a situation with so much uncertainty as now I would prefer (that is if I was in the market) to have more defensive stocks.

If on the other hand you strongly believe that this bull run will continue then shipping could be a great investment. It is all about sentiment and risk and right now a feel that these two factors do not favor transport stocks 

Well as you are a bear and have been one for some time and have been wrong  many times here.
TBSI is not your usual shipper big growth here. The economy is doing great here in US and will pick up next few quarters. Don't fall for the US going into the tank.  The only thing to watch is the fed and when they raise rates next year because of the strong growth.

Worldwide demand for oil and gas continues to grow which requires more and more shipping. This benefits tanker companies.
With a number of countries experiencing serious draughts, corn, wheat, soybean, oats and rice will be in short supply.
China , Australia and Argentiina are all having problems which  means buyers will have to look to the US and Canada for Grains.
This means a surge in dry goods shipping demands as buyers have to obtain their grains from more distant ports like the US verus their more trad=itional purchases closer to home.
Russia would normally buy grains from China and Australia but due to poor crops will be forced to buy from  US and Canada.
Buy TBSI and DSX

I hope you're right!
I got in at 21.21 up 7% just today.

She is looking so pretty