3SOF

QuoteShipping index is hitting new high, so the natural conclusion is TBSI is taking business away from EXM?

Nah, EXM had great earnings, it's just that it missed analysts expectations, which were extremely inflated. I mean, analysts are expecting $7.28 EPS for EXM next year:

Excel Maritime Drops 11% After Missing Forecasts

QuoteAlso TBSI is more diversified than EXM and I am under the impression that last time David mentioned EXM's fleet is pretty old, my memory could be wrong ...

I don't recall this either, but I guess TBSI's fleet is older than EXM's, since TBSI has 35 vessels, and EXM has just 18 vessels. However, TBSI's operating margin in Q3 was 31.9% and EXM's operating margin was 50%. Does this mean EXM is able to charge more for their ships, because they're younger?

Let me check this ... EXM's average age is 12.9 years. TBSI's is ...

«In the last three years, the TBS owned and controlled fleet has grown from 12 to 33 vessels by September 30, 2007, with an average age of about 21 years.»

TBSI looks awesome from a fundamental standpoint, but EXM looks even better, at least on a first sight analysis. Here's why:

EXM closed yesterday at $46.94 and analysts' average estimate for 2008 EPS is $7.28. TBSI closed yesterday at $44.28 and 2008 average analyst EPS estimate is $4.27.

This means EXM is trading at 6.4 times forward earnings and TBSI at 9.6 times, therefore EXM seems more attractive. If it was a few days ago I could buy EXM exclusively on this thought ... but I must adopt a new "investigation process". One that takes more time and effort, in line with what I've written at UTVG's thread today.

I'll keep holding TBSI for the long term.

mbaugh, you seem somewhat anxious about TBSI, did you buy call options instead of shares? (don't reply if you don't want to)

Good luck

No David, I don't do options.  I'm just frustrated since TBSI has moved down rather hard and fast.  I know it can recover just as quick.  I think my problem is that I read too many negative news stories and it has started to make me a little more nervous about keeping open positions.  That's why I look forward to your posts, you help keep the light shining for everyone.  Thanks!

Mbaugh

QuoteNo David, I don't do options.

That's good to know. More than 90% of people who play with options lose money over the long term.

QuoteI'm just frustrated since TBSI has moved down rather hard and fast. I think my problem is that I read too many negative news stories and it has started to make me a little more nervous about keeping open positions.

Yes, the Main is losing roughly 19% in TBSI, in just three days invested (dips always go deeper than we think). The general market has been extremely volatile and investors are nervous. This is usually when it pays to be fundamentally based and long term oriented.

Looking at the following table we see that TBSI's fundamental improvement over the last 12 months was nothing short of exceptional:



Look how a 41% increase in revenues lead to a 174% jump in fully diluted EPS, to $0.96 in the 3rd quarter.

TBSI has been beating analysts' estimates every quarter, so they've been forced to raise their full year 2007 and 2008 projections:



Currently for 2008 analysts expect TBSI to earn $4.27 per share, so its forward earnings multiple is 10. EPS grew 174% from a year ago and the P/E is 10, so this is an incredibly attractive combination.

It tells me investors are extremely worried about the global economy and they've priced in exactly that. I believe the actual reality will be far better than the current doom & gloom prognosis, actually I expect strong global economic growth to continue.

I'll elaborate on this macro call further over the next update for TBSI. I'll keep holding TBSI for the long term.

Anyone else here holding TBSI?  I'm hoping that they don't take it down to its 200 dma.
Any thoughts?

I have this too. All these dry shippers like exm and drys have been selling off. It's the sector. Don't know how far down,but you can say that for most stocks recently.

I own TBSI too....another excellent minus 6% for my portfolio today...I look forward for margin calls and forced closing of my positions.

Then, the bankruptcy

I bought with David too. It looks like the stock is heavily correcting. If the market stays this fickle, I think it will take it down to 200SMA, possibly.

Hey, Terra, why do you buy on margin? I gave this up long ago, after having lost 50% of my capital on short positions. I no longer sell short, nor do I use margin.

  Nevertheless, my porfolio is going into red full steam compared to its inception value 2 years ago. 

Call me a weak hand, but IMO, TBSI will follow EXM and DRYS in terms of its forward P/E.  Both EXM and DRYS are trading at 5 times forward earnings and TBSI is trading at 9 times forward P/E.  It seems TBSI will catch up will the other two and may fall to 5 times its Forward P/E which would put it at 21.4.  I hope not! I sold my shares this morning at 40 at a loss. 

whats causing it to trade with a much higher forward PE?

Lets face it. If you are sitting on more then 400% profit since the start of year then would not you sell some if there is some uncertanity in the mkt. TBSI is being hammered due to the same reason, it was more then 400% up year to day when it was bought for the main.

That's exactly why I don't invest in stocks anymore.  I trade only credit spreads.  I didn't have a spread on this stock, but I had one on DRYS (bull put spread).  When the stocks in this sector turned over, my stop was hit (a contingency to buy back the short put), and I made a fortune on my remaining long puts as the stock was tanking.

I would really like to see another portfolio on 3SOF, dedicated to options in various strategies.  I guarantee you'll have a lot better performance than any of the portfolios you have now!   

QuoteI guarantee you'll have a lot better performance than any of the portfolios you have now!   

I guarantee you'll lose all your money in less than a year. Do you want to give it a try at managing such portfolio Leaira? Thanks.

Quote from: mbaugh on November 19, 2007, 12:52:15 PM
Call me a weak hand, but IMO, TBSI will follow EXM and DRYS in terms of its forward P/E.  Both EXM and DRYS are trading at 5 times forward earnings and TBSI is trading at 9 times forward P/E.  It seems TBSI will catch up will the other two and may fall to 5 times its Forward P/E which would put it at 21.4.  I hope not! I sold my shares this morning at 40 at a loss. 

You're a weak hand ! You're also a brave and honest man. Thanks for your testimony and contribution to this thread mbaugh.

I guess the only reason why TBSI is trading at a higher than average relative to its peers earnings multiple is because its 2008 estimates weren't upgraded yet, since there are just two analysts covering the stock. Look, we just got an upgrade:



From $4.27 to $4.51 EPS estimate for 2008.

I agree with Stocky, TBSI is down because it was up quite a lot in 2007. But I believe the rise was for a very good reason and shares are extremely cheap at this point and should rebound towards the end of the year.

As I look at TBSI's markets, especially the ones in South America ...



... I don't see how they won't keep growing their international commerce.

I don't understand why the Shipping Industry is so cheap now while it is growing and set to grow so fast in the upcoming years, in my view. Is it because of that old theory that with the prices up companies will just buy many more ships, driving supply also up and ultimately putting pressure on prices and margins?

I don't think the industry would do this harm to themselves. The story is different, it's just that today we have fast growing trading partners in the World where before there weren't any ... the big majority of trade and transportation was made between the US and Europe. Now we have the Rest of the World participating and that's driving up demand for maritime transportation and that's not likely to slowdown anytime soon in my view, because these emerging economies are still very far away from the end of their expansion. I believe we'll have ten more years of it.

Anyway, TBSI's chart is, how should I say it, perfectly bearish. Everything points South on the technicals ... but I expect this to change sooner rather than later, you know how a couple of weeks of positive activity can change a chart completely, it is so volatile.

I thought about throwing more money at it and also buy EXM, but ... well, I'll wait a bit longer before buying anything new, my recent picks have performed quite poorly.

I agree it is a good idea to hold some, sell some and wait with cash when things are this shaky. Our problem here is that we typically meet the tough corrections fully loaded. I know it is hard to avoid, but we should probably sell dodgy stocks, like CHME once we smell the smoke, hold sound businesses, like TBSI and not invest more until we are at the end of a sharp decline (this is a sticky point, it is rather judemental to determine such point, but indicators setravis uses may help).

Market goes up and my portfolio goes down...I have chosen a very bad week to quit smoking...

This stock is a rollercoaster.  How do you do +10% to -7% and counting.