EXM

[yukiii]

All shippers are down this week because of the peak in price. China rate increase will effect them some more this week.
EXM rates are locked till 2008  so not much grow going forward the trade was already made. Sell EXM and but DRYS when it bottoms that the trade. DRYS down 15% sofar last week. If you belive in the rates going up or staying the same but another shipper.........
DRYS TARGET IS $50 EXM IS $28

[wxmang]

That was my conclusion too
Here is the difference (Before the shipper correction):  (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

DRYS just got 15% cheaper versus EXM's 5% loss last week.
IMHO, DRYS seems like an even better deal!

[yukiii]

That was my conclusion too
Here is the difference (Before the shipper correction):  (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

DRYS just got 15% cheaper versus EXM's 5% loss last week.
IMHO, DRYS seems like an even better deal!

It would be nice to get into DRYS under $35 will see what happens on Monday........

[David Randolph]

It would be nice to get into DRYS under $35 will see what happens on Monday........

Close yukiii, the low of the day was $35.09. Good luck with DRYS

But tell me yukiii, one of your arguments for selling EXM was your expectation of shipping rates going down, that is, a macro reason. Yet, you're bullish on another shipping company. Can you explain your reasoning? Thanks.

EXM's 1st quarter earnings will be released after the close, analysts expect $0.64 EPS on $34.98 M revenue, I'll hold EXM through earnings.

[ramlau]

Missed by 3 cents...

[nullzero]

I dont think this stock is going to go down much may 2-3% from here. I think if anything this earnings report is going to be seen as luke warm reaction.

[yukiii]

It would be nice to get into DRYS under $35 will see what happens on Monday........

Close yukiii, the low of the day was $35.09. Good luck with DRYS

But tell me yukiii, one of your arguments for selling EXM was your expectation of shipping rates going down, that is, a macro reason. Yet, you're bullish on another shipping company. Can you explain your reasoning? Thanks.

EXM's 1st quarter earnings will be released after the close, analysts expect $0.64 EPS on $34.98 M revenue, I'll hold EXM through earnings.

I was giving you the reason in general why shipping stocks went down. It was a good chance to buy one ones that will do better going forward, EXM is not the one to buy........ Shipping is very complicated, there is one guy on yahoo that knows this stuff inside out. age of fleet, contracts, shippings rates,

EXM range $22-$28

[nullzero]

TBSI seems to be the one on fire for the shippers.

[yukiii]

TBSI seems to be the one on fire for the shippers.

Yeah, looks good should hit $30.00

[yukiii]

After Hours action on EXM

17:59    $ 24.61   500
17:59    $ 24.58   1,000
17:25    $ 25   100
17:17    $ 25.36   100
17:17    $ 25.38   800
17:17    $ 25.29   100
17:06    $ 24.85   200
16:38    $ 25.25   100
16:36    $ 24.85   100
16:34    $ 24.75   100
16:34    $ 24.80   100
16:28    $ 24.50   100
16:28    $ 24.80   100
16:27    $ 25.10   300
16:19    $ 25.23   100
16:14    $ 25.8603   1,000
16:14    $ 25.8603   600
16:13    $ 25.8424   200
16:13    $ 25.8603   100
16:13    $ 25.8603   500
16:09    $ 25.46   500
16:09    $ 25.46   100
16:09    $ 25.46   100
16:09    $ 25.46   100
16:09    $ 25.46   100

[David Randolph]

EXM's results were released yesterday after the close:

• Excel Maritime Reports Results for the First Quarter 2007 and Initiates Quarterly Dividend Payout Policy
Market Wire (Tue 4:05pm)

Everybody knows I dislike dividends, but this quarterly dividend policy tells me management is very confident in being profitable for years to come. $0.20 a quarter is $0.8 for a full year, which at $25.45 means a 3.14% dividend yield. Not bad.

But I'm more interested in reviewing my valuation model estimates:

1) Dilution factor

I had 1.02, but the share count rose just 0.09% from the year ago levels, which is basically zero. I'm going to increase the initial share count slightly to 19,959,257 and reduce the dilution factor to 1.

2) Revenue CAGR

I had 1.1, which means 10% revenue growth. Revenue growth in Q1 2007 when compared to Q1 2006 was 22.1%. However, I don't feel confident enough to raise my revenue CAGR estimate, because analysts are expecting just 4.5% revenue growth in 2008.

3) Net profit margin estimate

I had 50% here, but now I see that's too much. After further investigation I see that the years where net profit margin was higher than 50% were impacted by special items. For example, in 2005, there were $21 M in "other income, net". Without this the net profit margin in that years would have been 39%.

Net profit margin in Q1 2007 was 33.89%. I believe this is a more fair estimate.

4) EPS multiple estimate

Here I'll put the Shipping industry average, which currently is 15.76.

Computing the valuation model I get the following:



It still says the stock is attractive, with an expected 20% share price CAGR, but less than what it was previously. The optimal selling price is now $28.32.

The stock will probably react negatively to earnings today (as it has been the case with most stocks lately, which tells me the current bull market has a lot to go), but it would obviously be cheap underneath the current levels. I'm prepared for some pain, but I expect to take a small profit in EXM if given some time.

I'll continue holding EXM.

[David Randolph]

EXM's dividend yield just rose from 3.1% to 3.4%, how good is that?

Dividend's are a big pain in the ass if you ask me. I was expecting yesterday's fall, but I failed to cut the loss quickly. That's because I agree with yukiii, I see EXM between $22 and $28, therefore I expect to take profits when the stock goes up to do a double top just above $28. But, wouldn't have been better to just take the loss at the open and move on, given the uncertainty of the long term outlook, and the more or less certainty about the market's negative response to earnings?

It's an open debate.

At least for now I'll stick with my long term approach, based on my valuation model that says the optimal selling price for EXM is $28.32, so I'll keep on holding EXM.

[David Randolph]

Probably I should have sold EXM right then when I reduced my long term estimates. But now I see it going to the "too cheap" territory, so I'll hold. I expect the stock to maybe touch the 50 days SMA and then make a second bull run to a top around $29. I'll take a small profit then. Not a trade I'll be proud of, I hope it doesn't damage the portfolio's return even more. It wouldn't make sense to go down much more, since EXM is now trading at 8 times 2007 estimated EPS and the industry average is 15.16.

[David Randolph]

The Shipping industry average earnings multiple declined to 14.45, so I've adjusted my EPS multiple estimate for EXM. This way the model says the optimal selling price is $25.96.

I'll sell EXM around that level if I have the chance.

[David Randolph]

The shipping industry average earnings multiple declined to 13.38 and with this change my valuation model says I should sell EXM at $24.02. The stock closed at $23.96 yesterday, so this is pretty much a sell at the open indication.

Not a trade that I'll be proud of. The trading plan for EXM is SELL.