EXM

[David Randolph]

EXM technical & fundamental analysis:

A video Analysis from 3StocksOnFire.org

EXM is trading at just 10.4 times 2007 estimated earnings, and I believe there's upside to those estimates, because the company already had net profit margins of around 60% in the past (just 25% in 2006). Basically, they already bought 16 big ships and now they rent them and make a lot of money. The chart is also quite bullish.

The trading plan is:

Buy EXM, 6.66% of capital as always.

[ramlau]

David nailed it. I've been an EXM long since $23. It's still terribly cheap, IMHO. So is DRYS.

Buy buy buy!

Ram

[garyaross]

A little caution might be in order with earnings due after market close on Tuesday 5/22

[yukiii]

NEW YORK, May 14 (newratings.com) - Analysts at Cantor Fitzgerald maintain their "hold" rating on Excel Maritime (ticker: EXM). The target price is set to $22.

In a research note published this morning, the analysts mention that the bulk of Excel Maritime's vessels are trading under long-term and short-term time charter contracts, providing visibility into the company's revenue stream. Given Excel Maritime's older fleet profile, especially in the Handymax segment, the company's stock should not trade in-line with the peer average, the analysts believe.

[nicknite20]

David,
Why not SFL / GMR which have a significant dividend yield?
Nick

[DragonAMG]

David,
Why not SFL / GMR which have a significant dividend yield?
Nick

Or GNK - pays 7% div

RE: GMR - Morgan Stanley just bought 3.86 million shares for about 112.3 million ~ $29.09/share from Bergesen Worldwide Ltd. 

GMR looks like a good stock for the IRA

[yukiii]

Diana Shipping (NYSE: DSX) was started at JP Morgan with an Overweight rating based on valuation and positioning. Lazard started Diana with a Buy rating, expecting demand for dry bulk shipping will outperform supply through 2010. 8.9% div. 83% growth this year.

DRYS looks good 5x 2008 earnings of $8.00

[wxmang]

I Love DRYS too

Price target was raised a week or so ago to $50/Share as well

I am thinking Dave likes EXM more MAYBE because:

Next year's growth rate is a tad better.  I dunno. He is the Expert 
Here is the difference:  (From Yahoo)

Next Year's Growth Rate:
EXM=   7.9%
DRYS = 5.8%


This year's Growth Rate:
EXM =    48.8%
DRYS = 117.2%

Forward PE:
EXM = 9.68
DRYS= 7.22

Shipping group current multiple (P/E): 15.40
So, the stocks should be close to these stock prices: 
EXM  = $38.96
DRYS = $79.6

Things that make you go Hmm!

[yukiii]

Yeah, EXM
They have several vessels on long TCs, and thus have moderate upside to 2008.

[David Randolph]

David nailed it. I've been an EXM long since $23. It's still terribly cheap, IMHO. So is DRYS.

Buy buy buy!

Ram

Thanks Ram, DRYS also looks cheap here.

A little caution might be in order with earnings due after market close on Tuesday 5/22

Do you mean I should be cautious because earnings can be below expectations? Or simply because they are coming? Of course, I can't be cautious because the earnings date is coming, since if I were to sell before earnings, or not buy because of earnings releases, I would be doomed to be a short term trader. Fortunately I can hold through earnings and be a long term investor. Thanks for the advice garyaross

David,
Why not SFL / GMR which have a significant dividend yield?
Nick

I dislike dividends. Moreover, SFL revenues are shrinking and it is a $2 B plus market cap. GMR is trading at 14 times estimated 2007 EPS and EXM is trading at 10 times, so I prefer EXM.

Or GNK - pays 7% div

GNK is diluting shareholder's value, since in 2005 it had net income of $54 M and EPS of $2.90 and in 2006 it had net income of $63 M and just $2.51 EPS. They might as well cut that dividend and stop printing shares.

Diana Shipping (NYSE: DSX) was started at JP Morgan with an Overweight rating based on valuation and positioning. Lazard started Diana with a Buy rating, expecting demand for dry bulk shipping will outperform supply through 2010. 8.9% div. 83% growth this year.

DRYS looks good 5x 2008 earnings of $8.00

DSX is very expensive when compared to EXM, since, for example, its market cap is $1.2 B for 2006 revenue of $116 M, and EXM is a $527 M market cap for 2006 revenue of $124 M. Also, what's that stuff of preferred dividends in DSX? DSX has also been a "heavy diluter" over the past few years.

DRYS looks very interesting ... why do you say $8 EPS for 2008? Analysts are predicting just $5.47, but I would go more with you than the average analyst. What's your reasoning, continuing growth?

I am thinking Dave likes EXM more MAYBE because:

Next year's growth rate is a tad better.  I dunno. He is the Expert

Hi wxmang, I like EXM a lot, but I never said I preferred it to DRYS, in fact, this is the first time I look at DRYS and indeed, at first sight it looks attractive. I hope somebody asks for this analysis at today's Analysis on Demand, so I can check it out in a more in depth manner.

Ok, going back to EXM, this round for competitor's made me even more confident on the success of this trade, since EXM looks to be the most attractive stock of the group (also the smallest market cap, just $527 M, all others are close or north of $1 B).

The technical correction seems overdone, I'll keep holding EXM.

[garyaross]

Re: Earnings.  David, since you do such a good job of fundamental analysis on stocks before we get in, it allows the investor a little more security about future imminent earnings.  I guess my point is that on your subscriber list many are not long term traders.  Buying right before earnings is always scarry.  My personal approach is to buy 1/4 or 1/2 position in such cases.

[David Randolph]

Re: Earnings.  David, since you do such a good job of fundamental analysis on stocks before we get in, it allows the investor a little more security about future imminent earnings.  I guess my point is that on your subscriber list many are not long term traders.  Buying right before earnings is always scarry.  My personal approach is to buy 1/4 or 1/2 position in such cases.

Thanks for your personal opinion and good luck with your approach garyaross.

I'm not feeling well today, can't read another line ... I'll keep holding EXM.

[la-onda]

fyi:nice presentation
http://www.excelmaritime.com/files/bearexcel.pdf

[yukiii]

Shippers are going down today, as rates have peaked in May and will be heading down as usual. Follow the rates. sell when they peak.....

[David Randolph]

fyi:nice presentation
http://www.excelmaritime.com/files/bearexcel.pdf

Thanks for the informative presentation la-onda

Shippers are going down today, as rates have peaked in May and will be heading down as usual. Follow the rates. sell when they peak.....

Yukiii, thanks for the information, but can you share your source?

The index that economists usually use to measure the average price of ocean transportation of industrial bulk commodities is the Baltic Exchange Dry Index, which is up almost 50% in 2007:



The historical chart above clearly shows that the "sell in May and go away" aphorism doesn't apply to the shipping markets (also not to the stock market). Yes, there was a very small correction lately, but the trend is bullish, shipping rates just made a new all time high recently.

This is clearly an industry I want to be involved with, and the comparison I made between EXM and its industry peers tells me EXM is the most attractive of them all.

The stock may have several corrections along the way, like the one that is happening now, but the long term technical trend is bullish and fundamentals are attractive. I'll continue holding EXM.