3SOF

Quote from: notbeln on December 24, 2007, 05:43:34 AM
David

May you explane why TBSI better than DRYS?
DRYS projections are fantastic, EPS for 2008 something like $15-20   

Best,
Notbeln

Do your DD on DRYS..the CEO is a loose cannon.

http://www.3stocksonfire.org/trading/index.php?topic=10799.0

Thank you . 

Happy Cristmas !

Nice bonus for the hard working fellows.

http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0001065648-07-000071&Type=HTML

I wonder if the CFO will complain, he only got a meager $0.5M bonus.

I know berloga,  I was starting to feel sorry for this "poor" guy, BUT then I check insider information. Looks like over the month of November he sold over a million dollars in stocks (25,000 shares). 
Chee, I don't feel sorry for him anymore.

http://finance.yahoo.com/q/it?s=TBSI

Happy New Year!

David,
Does it concern you the dry baltic index has fallen almost 20% in the past few weeks?    Probably the reason the stock has fallen so much.

Man, is this market tough or what?  Does TBSI really deserve to fall this far?  Its amazing how one day the market loves the shipping sector and buy all they can and then WHAM! the world slows down the next day and shipping sucks!  Today in my local newspaper there's an article talking about how the shipping boom is over, its titled "Shipshape no Longer?" The article quotes two analyst, Oppenheimer Tim Tiberio who states that "an increase in the number of ships subdued rates as demand dipped around the holidays."  Analyst Natasha Boyden from Cantor Fitzgerald states that "new ship building has caught up with demand faster than expected and therefore drybulk shares will likely start to pull back this year."

So basically, we now have two many ships and not enough demand.  Gee, why do all the shipping companies keep buying more ships if theres no demand?  These analyst change their minds so quick, it wouldn't surprise me if a week later they come out a say "buy all you can in the shipping sector, demand is outpacing supply!"  Anyways, I'm  confused, because since the market is irrational, it can take longer for TBSI to go back up or does someone here believe that TBSI can't stay this low for long?

Quote from: jrtabor on January 04, 2008, 03:24:15 PM
David,
Does it concern you the dry baltic index has fallen almost 20% in the past few weeks?    Probably the reason the stock has fallen so much.

Not really jrtabor, I believe it is a correction in a long term rising trend:



Even if the Baltic Dry Index stays between 6,000 and 8,000 for a very long time, I think that is enough for TBSI to remain very profitable and expand its revenues and profits.

QuoteSo basically, we now have two many ships and not enough demand.  Gee, why do all the shipping companies keep buying more ships if theres no demand?  These analyst change their minds so quick, it wouldn't surprise me if a week later they come out a say "buy all you can in the shipping sector, demand is outpacing supply!"  Anyways, I'm  confused, because since the market is irrational, it can take longer for TBSI to go back up or does someone here believe that TBSI can't stay this low for long?

I don't know for how long TBSI will stay this low, or if it will go lower over the short term or not. Since I'm losing 46% holding this stock (ouch), it's obvious I was wrong about my entry timing.

Now, I continue to be a long term bull on Shipping because I see demand for moving goods from one side of the planet to the other rising strongly for the next 10 years. Communications work at the speed of light, but the transportation of goods (unfortunately) will always be made in the same old ways. In the South America/Europe and South America/Asia cases, it will always have to be made by ship or air plane. And I don't think tons of iron ore, or copper, or corn or any other commodity will be moved through an air plane.

I don't think there's any likelihood that international commerce between South America and Asia will slowdown in the upcoming years. In fact, I believe it will continue to grow strongly. And yet, you have TBSI trading at just 6.5 times 2008 EPS estimates. The valuation is so extreme, that if the current negative perception on global growth changes, TBSI's stock price will double or triple in a short period of time.

And I remain confident that the current negative perception on growth is overblown and yes, the US may have a recession, but that's already priced in by the stock market's valuation.

I'll keep holding TBSI for the long term.

Another 9% fall. I'm losing 50.6% now.

The whole shipping industry is viewed as "cyclical". This explains why the stocks keep going down in the face of very low valuation metrics. Investors believe the cycle has turned and stocks will go down to where they came from.

Interestingly, this "going down while the p/e is so attractive" happened with housing and banking stocks. As we all know now, these sectors are in deep trouble and the low p/e turned negative in many occasions.

I don't see how the same thing could happen to shipping stocks. Demand for shipping services will just keep growing in my view, because demand is based on the nascent international trade between emerging economies, which is different from demand coming from local US consumers. US consumers were getting into credit and buying new homes because interest rates were very low and that couldn't last long. On the other hand, demand for shipping services, because it comes from growing international trade between developing countries, will keep growing. The US-centric World is giving space to a multi-center World, which is much more healthy.

Shipping stocks can also be viewed as cyclical because, if the price for the shipping services (measured by the Baltic Dry Index) goes up, shipping companies will buy more ships and eventually overcapacity will bring prices back down to the previous levels.

This last situation is probably what is happening in the real world. But, the way I see it, more demand and more ships, even at the same price, mean higher revenues and profits. And if there will be higher revenues and profits it doesn't make sense to value these companies at 5-6 times earnings.

The next time I'm confronted with a new industry I'll make sure I understand if it is cyclical or not, because cyclical stocks are valued in a different way.

As for the current moment and TBSI, I'm already losing 50% plus and I'm a long term bull in the shipping industry (I believe that despite the up and down cycles, the industry will grow a lot over the years), even more so in TBSI in particular, because it operates in the right markets and management doesn't dilute shareholders value.

I'll keep holding TBSI for the long term.

Hmm. It's interesting that QMAR never corrected as much as many of the others and then today rallied hard on it's biggest (6.5X) volume ever, (I think) before pulling back with the market and closing with a doji. Still ended up 8%.

Quote from: BigSully1 on January 08, 2008, 04:58:46 PM
Hmm. It's interesting that QMAR never corrected as much as many of the others and then today rallied hard on it's biggest (6.5X) volume ever, (I think) before pulling back with the market and closing with a doji. Still ended up 8%.

Indeed BigSully1, QMAR has been showing relative strength within the dry bulk shipping industry, down "just" 3.1% today. A few quick facts about it: IPO in mid 2005, $1.3 B market cap, 2008 EPS estimate of $2.48, so forward earnings multiple is 9.5:



I want to write a few comments on TBSI because it was today's biggest loser of the Main Portfolio (also the biggest loser since my entry, with a 52% loss).

The stock is down just to its mid-August lows, but my entry timing was lousy. Perhaps I should have been more careful with timing, or else I should have cut my losses quickly, but the reality is a 52% loss and that's what I have to face.

TBSI was up 8 fold at one point in 2007, when it reached a high of $71, so maybe the 67% top to bottom drawdown shouldn't be all that unexpected, I guess I was just carried away by the attractiveness of the fundamental metrics.

Anyway, what do we have now?

Throughout this whole up and down process, TBSI didn't issue any new share (contrary to what many shipping companies did). The share count is 27.75 million, so the market cap is $712 M.

TBSI had 3th quarter EPS of $0.96. So, if everything stays basically the same going forward, this company will earn $3.84 per share per year (actually analysts estimates for 2008 are higher, at $4.51), so TBSI's earnings yield is 15%. The p/e multiple is 6.7.

Here are just a few remarks taken out of the latest earnings press release:



The areas of the World in which this company operates and their liaisons will keep growing strongly in my view. 

Fundamentally I don't see anything wrong with TBSI, in fact, I believe the stock continues to be very attractive as a long term investment.

TBSI is still up 200% over the past 52 weeks, reflecting the marked improvement in fundamentals. I guess I shouldn't read too much into the current technical weakness or the 67% drop from the top, because probably we're just going through a "reverse to the mean" process.

As for the short term technicals, the stock held the $25 support on close, despite its current relative weakness (we've already seen how that changes). We'll see what the next few days bring ... I'll keep holding TBSI.

I joined in here, the market looks ready to do some rallying, and TBSI should be at a technical support level here, so hopefully its hit bottom!  I had told myself I didnt want to buy anything just yet, but TBSI looked too compelling here.

Maybe tbsi is morphing from a submarine back into a surface vessel. We can only hope.

4th quarter earnings are about to take place, I believe DRYS reports in mid-February and TBSI reports in March.  You would think that large funds would start to buy now before the earnings are released.  I believe they will since they know the projected EPS and the fact that the shipping companies are soooooo cheap right now.  (Please, don't get any cheaper! ) 

On a side note, what really sucks is a POS stock like RIGL , a company without any revenues keeps going up and the good solid companies such as TBSI are being beat to death.

Anyways, I'm holding!

Keep up the good work David!

'Reverse to the mean'?  David can you clear please.