TBSI

[yukiii]

FYI.
A list of what's been strong the past week

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[David Randolph]

TBSI was up 4.16% on Friday, and it was the second best performer of the Dry Bulk group:



Technically the stock continues to consolidate its recent gains, as it trades within the $20.3 - $24.36 trading range.

Fundamentally, TBSI is trading at 7 times next year earnings estimates:



The Shipping Industry trades at 14.19 times earnings:



So, this trade is simple. If TBSI's estimates are more or less correct and the stock trades at its industry average by the end of 2008, it will then be a $3.19*14.19 = $45.26 stock. That's roughly double what it is now, and that means a 42% average annual return on our investment.

I'll keep holding TBSI.

[David Randolph]

Again, TBSI was the second best of the Dry Bulk shipping companies:



Some people couldn't stand the volatility and were shaken out of this marvelous holding, but TBSI is getting ready to seriously reward the strong hands:

[David Randolph]

After being in the second place for two days in a row, TBSI took the first place:



Breaking out to a new all time high. Fundamental value is a lot higher. Just let the profits run.

[kpunarc]

i'd say it's a confirmed breakout if it closes positive today 

[David Randolph]

i'd say it's a confirmed breakout if it closes positive today 

TBSI did it, just barely, but it closed positive. The Baltic Dry Index recovered some more ground yesterday, even though stock markets around the world were down.

I'll keep holding TBSI.

[yukiii]

TBSI looking strong going to $30 soon. DSX also looks good.

[David Randolph]

TBSI was again the best in class of the Drybulk shipping group:



I'll keep holding TBSI.

[David Randolph]

The Baltic Dry Index rebounded 4.4% on Friday:



Yet, TBSI couldn't stand the pressure for profits, since it has been up so much lately. The intraday dip was met by aggressive buyers and volume was above average, with 662,800 shares changing hands.

I'll keep holding TBSI.

[David Randolph]

Surprisingly enough the Baltic Dry Index rose some more yesterday:



And TBSI was the best of the Dry Bulk group (again):



The stock rose 1.79% yesterday, as the general market fell. I'll keep holding it, expecting to see $30 plus sooner rather than later.

[David Randolph]

Zacks made a few comments about TBSI today:

«TBS International Ltd. (NASDAQ: TBSI) is an ocean transportation services company that offers worldwide shipping solutions through liner, parcel and bulk services, and vessel chartering. Over the past two months, earnings estimates for this year and the second quarter advanced approximately 35% and 27%, respectively. As a result, the company was a leading Zacks #1 Rank last week as shares moved forward 14.3%.

In May, TBS International announced strong first quarter results thanks to continued market strength, as well as the consistent implementation of its business strategy the past several years. Total revenues reached $70.8 million, which was up 11% from the previous year's $63.8 million. Excluding items, earnings per share of 54 cents eclipsed the consensus by 35%. The result also easily surpassed the prior-year's performance.»

The Baltic Dry Index rose another 1.1%:



And TBSI outperformed its group (again):



Unfortunately some people were stopped out of TBSI near its lows. I'll keep holding the stock.

[David Randolph]

The BDI rose another 1.23% to 6180 points today, but unfortunately TBSI couldn't perform, it sold of a bit on profit taking. I welcome these healthy corrections, though, because they make the ascending trend more reliable.

Analysts covering the stock see $3.19 EPS for 2008 and no less than $2.20 for 2007. The stock should at least reach $30, and even there, it would still be quite cheap.

I'll keep holding TBSI.

[la-onda]

from Zack:
TBS International (TBSI) has skyrocketed a mind-blowing 209% year-to-date. Growing cargo volumes and new businesses have helped TBS International exceed earnings estimates by double-digit percentages for three straight quarters.

Full Analysis

TBS International is an ocean transportation services company that offers worldwide shipping solutions through liner, parcel and bulk services, and vessel chartering. TBS has developed its business around key trade routes between Latin America and China, Japan and South Korea, as well as select ports in North America, Africa and the Caribbean. TBS provides frequent regularly scheduled voyages in its network, as well as cargo scheduling, loading and discharge for its customers. Its services primarily carry steel products, salt, sugar, grain, fertilizers, chemicals, metal concentrates, aggregates and general cargo. As of month-end March, its controlled fleet consisted of 33 vessels.

On May 14, the Zacks #1 Rank stock reported first-quarter earnings of 54 cents per share, up from 26 cents in the year-ago period and 14 cents above expectations. The 35% surprise marked the third consecutive quarter that earnings surpassed analysts' estimates by a double-digit percentage. Driving the strong earnings growth, revenues climbed 11% to $70.8 million due to strong demand in the bulk cargo market.

The company has also benefited from expanding cargo volumes and new business, such as a new parcel trade shipping timber and steel parcels from Brazil and Argentina to the Mediterranean, and coal from the north coast of Latin America to Brazil and Argentina. In addition, average charter rates have increased 35.8% to $16,740 per day from $12,330 per day a year ago.

In 2006, the company generated over 55% of its international revenues from key South American countries including: Brazil, Chile, Peru, and Venezuela. Continued economic growth in this region should result in further earnings momentum for this niche shipping player.

Following the company's impressive first-quarter results, full-year 2007 estimates were increased by 61 cents to $2.35. Also, next year's estimates were summarily raised by 78 cents to $3.19, implying earnings growth of 35.7%. Lastly, the company is currently rated a number one out of 44 companies in the Transportation-Shipping category.

TBSI has risen an astonishing 209% year-to-date after gaining an impressive 31.6% in 2006. On Jun 5, TBSI rose to record highs before slipping roughly 19%. The stock then proceeded to rally over 34% to current levels. As the dry bulk market continues to grow, the direction of future momentum should remain positive. However, due to the amazing gains this stock has already delivered, investors should exercise caution and monitor their positions closely.

incl audio file:
http://www.zacks.com/rank/zcommentary/?id=5349
chart:

[David Randolph]

Zack's has been giving very nice publicity to TBSI and not without cause, after all fundamentals have been improving significantly and TBSI is "the best shipping company".

I think the following paragraph is what is moving the stock in this very decisive bullish way:

«Following the company's impressive first-quarter results, full-year 2007 estimates were increased by 61 cents to $2.35. Also, next year's estimates were summarily raised by 78 cents to $3.19, implying earnings growth of 35.7%. Lastly, the company is currently rated a number one out of 44 companies in the Transportation-Shipping category.»

However, my valuation model says that there are just 29% left to the optimal selling price of $39.14.

Moreover, I had just 1% dilution factor in the model, but the company announced the following on June 29th:

TBS International files for $300 mln mixed shelf

This means dilution will probably be much higher than my estimate and that will have a downward effect on those EPS estimates (or the real numbers).

I wonder if the very positive estimates weren't "ordered" to price this offering of securities at the highest possible price.

I'm suspicious of TBSI's intentions and I see heavy dilution going forward. If I change my dilution factor to 10% instead of 1%, the optimal selling price will be lower than yesterday's closing price.

I opt to take profits on TBSI. The trading plan is SELL.

[BigSully1]

Continues setting new highs. David made big mistake selling this winner and holding losers.