Global Oceanic Carriers Share Discussion Threads

[briggs1209] 29/1/2008 20:17

take over time in this market. Also some interesting comments about disruption to iron ore shipments.

[sambessey] 24/1/2008 16:19

mmm slight problem there... I think the share price has to go DOWN, not UP to hit 40p

Oh and please short away.... I'd love to pick this up on a P/E of around 2 :) :) :)

[ssbn 742] 24/1/2008 15:48

Oh dear this is going back to 40p. another OC garbage shares (dual listing he was going on)

[minuteman] 22/1/2008 15:41

B@gger, stop loss hit, I'm out

[minuteman] 21/1/2008 16:19

well someone likes them 50k buy today

[courant] 16/1/2008 22:51

GOC's entire fleet is out on time charter; these were mostly fixed between Sept 06-Jun 07, i.e. a BDI range of c.3-5000. So, the BDI can happily fall to those levels again and this won't really impact GOC's profits. In the meantime, GOC is enjoying strong cashflow.

A further point is that a lot of the negative action in the BDI has been caused by the Capesize sub-index; GOC is thus less exposed to the headline BDI figure. The same is true of GLBS and GPRT.

Courant

[tadtech] 16/1/2008 22:47

GOC have set rates according to the length of the contract. In other words earnings are 'protected' currently on forward charters. Thats why the earnings are 'visible'

I regret that these may indeed fall below £1 on sentiment, I still hold a few but sold most when I started to see the BDI tumble. Last time GOC shares fell below £1 but held in the 90's.

I will be watching this very carefully for a re-entry point. As they move fast when the time comes. I would suggest 90p could be a floor but who knows exactly at this junction of the markets.

[briggs1209] 16/1/2008 22:08

I am not so sure that the index will average 8000 points this year. However an average of 6000 would be fine. Now I know that GOC have already booked their ships out for most of the year. Does anyone know if they set prices in advance or is it the spot rate or a combination etc. Have enjoyed recent informative posts, thank you all.

[mr.oz] 16/1/2008 19:26

Drybulk shippers extend recent weakness as key index posts record drop

NEW YORK (Thomson Financial) - Shares of drybulk shippers tumbled Wednesday, extending their recent declines, after a key index measuring shipping costs for commodities registered its biggest one-day decline since records started in 1985.

The Baltic Dry Index, managed by the Baltic Exchange in London, declined 421 points, or 5.7%, to 6,915 Wednesday. The index has declined 37% since hitting an all-time high of 11,039 last November.

Many analysts have attributed the decline in the index to concerns about a potential recession in the U.S., which would weigh on global growth and hurt raw material demand.

Despite the sharp pullback in both rates and shares, CIMB analyst Raymond Yap said fundamentals in 2008 suggest that the current weakness will reverse.

Yap said freight rates are being driven lower by a temporary reduction in global seaborne volumes.

"During this sensitive period of price negotiations, miners are said

to be hiding or withholding exports as a means of improving their bargaining power," the analyst wrote to clients.

Yap forecast an average of 8,000 points for the Baltic Dry Index for 2008, up from 7,013 points in 2007. "Since freight rates are likely to be suppressed in [the first half of 2008], the stage is set for a potentially strong rally in [the second half] once iron ore price negotiations are completed."

Shares of Quintana Maritime Ltd. tumbled 17% to $16.21, Excel Maritime Carriers Ltd. dropoped 5.9% to $26.42, and Dryships Inc. fell 8.8% to $50.05.

Diana Shipping fell 5.3% to $21.10 and Genco Shipping & Trading Ltd. fell 3.2% to $35.69.

Euroseas Ltd. slipped 8 cents to $9.72. Eagle Bulk Shipping Inc. dropped 4.8% to $19.30.

Danaos Corp. lost 2.2% to $23.65

[jhan66] 16/1/2008 09:33

Can't see 60p low but judging by GPRT & current commentary on Baltic Index it could well fall further.

[lord gnome] 16/1/2008 09:31

Thanks TKelps. I've had this on my radar for a long time. 60p entry level would do very nicely. Bring it on.

[tkelps] 16/1/2008 09:20

I and several others have just opened a massive SHORT in GOC!
This is going to tank! 60p first target!

[apetley] 15/1/2008 01:01

.........and then down again!!
Still, nice big buy right at the close.

[apetley] 14/1/2008 13:39

This is such an enigma, this share.
Does it really move around on trades of a few hundred?
Or is it just mm's playing around?
I shouldn't complain too much as it's headed in the right direction at the moment and still looks very cheap to me.

[al911] 13/1/2008 20:20

Forecast
PE 07 5.26
PE 08 2.95


As can be seen, GOC is looking extremely cheap. On the one hand GLBS and GPRT are more exposed to the BDI highs as they have more contract renewals due, on the other hand GOC are more conservative with longer contract terms and IMO less susceptible to BDI volatility. The visibility of earnings also makes these very unlikely to miss their EPS forecasts.

The other attraction with GOC is the dividend policy which is to pay out 50% of profit - with forecast EPS from Jeffries rising from 22p to 33p

[al911] 13/1/2008 20:13

Earnings are very transparent for goc, 83% booked for 08 and 48% for 09.


Global Oceanic Carriers Ltd
18 December 2007




Global Oceanic Carriers Ltd. Takes Delivery of its Seventh Vessel

ATHENS, GREECE - December 18, 2007 - Global Oceanic Carriers Limited (AIM:GOC)
('GOC' or 'the Company'), a global provider of marine transportation services
for dry bulk cargoes, announces today that it has taken delivery of the M/V 'GO
Star', a Handymax bulk carrier, which the Company had previously agreed to
acquire for USD 38.3 million.

The M/V 'GO Star' was built in Japan in 1994 and has a carrying capacity of
43,656 dwt. As announced on June 22, 2007, the vessel has been secured under a
fixed-rate period time charter for 3 years with Breakbulk Marine Services, an
established Belgian operator, at the gross rate of USD 27,000 per day.

Including the GO Star, the Company's current fleet includes seven dry bulk
carriers, comprised of one Capesize, two Panamax, three Handymax and one
Handysize vessel with an aggregate carrying capacity of 456,273 dwt.

The Company has secured under fixed rate time charter employment 83% of its
fleet operating days for calendar 2008 and 48% for calendar 2009.

Michael Tartsinis, Chief Executive Officer of Global Oceanic Carriers Limited,
commented: 'We are pleased to announce that we have taken delivery of our
seventh vessel, the M/V 'GO Star', thereby expanding our revenue and profit
generation capacity. The period employment we secured for the M/V 'GO Star' is
consistent with our fleet deployment strategy aimed to provide strong and
sustainable cash flows for the longer term with first class charterers, thereby
minimizing our counterparty risk. We intend to continue with our fleet expansion
plans focusing on selective and accretive vessel acquisitions.'

[al911] 13/1/2008 19:43

Dated 3rd Jan 08
Interviewer is not very good.

[scburbs] 13/1/2008 18:58

"A new rail freight service between Germany and China, that would be twice as quick as sea travel, has been backed by six countries, Chinese media says.
The China Daily state newspaper says China, Mongolia, Russia, Belarus, Poland and Germany are to work together on the Hamburg to Beijing train route.

The states are to ease customs and border checks to minimise travel time.

China Railway Container Transport said the 20-day-long freight journeys should start in early 2009.

"Barring any complications, a scheduled container train should be shuttling between China and Germany in a year's time," said the firm's chairman Zheng Mingli."

[celeritas] 13/1/2008 18:51

Demystifying Dry Bulk Shipping: Low P/E Companies That Aren't Properly Valued
posted on: January 02, 2008


The dry bulk shipping industry is often misunderstood by investors but presents a lucrative opportunity to benefit from the rising global demand for transporting basic materials around the world. The business of dry bulk shipping involves operating large shipping vessels and renting them out to transport grains and metals. Metal miners and purchasers alike don’t have the resources to haul their goods without chartering the dry bulk shippers.

The industry has a lot of potential as demand for metals and grains have skyrocketed and the supply of ships to haul them is limited. The result is pricing leverage for the companies operating within the oceanic shipping industry. The rates paid to these companies is often locked in with forward contracts, but the current pricing power is tied to the Baltic Dry Index. The index has risen from 2000 two years ago to a peak of 11,000 in November to 9200 currently.

The huge run-up in the index has been mirrored in the performance of the major shipping stocks. Diana Shipping (DSX) has doubled this year, but is down 40% from its November peak when the Baltic Dry Index crested. The optimism from the dramatic rally in the Baltic Dry Index was the primary catalyst for the stock price appreciation, and similarly had a negative impact on the industry as the Index started a nosedive.

With both the Baltic Dry Index and shares of individual shipping companies falling hard the last two months, attractive entry points have presented themselves for investors. Worries of oversupply in the near future as new ship building is commissioned won’t have as bad an impact on the industry as expected since metals demand continues to grow leaving an inherent need for shipping services.

One company in particular has exciting prospects is DryShips (DRYS). The $2.3 billion company operates a fleet of 35 dry bulk shipping vessels. Shares are currently trading at just 9 times current earnings, and very cheap 4.4 times future earnings. The company has exceeded the analyst estimates for the past four quarters, and future estimates may be just as conservative. DryShips is a steal when you compare these splendidly cheap financial ratios to its peers and the general market where P/E’s of 10-20 are considered first class.

DryShips stock still has 70% to go to return to its peak of $131 a share set in November amidst the rally in the Baltic Dry Index. Further compounding the woes of DryShips was the announcement that the company bought a 30% stake in a deep-sea oil drilling company. This $400 million investment caused many to worry that the company was predicting the dry bulk shipping industry is beyond its prime, but in reality management saw an opportunity to enter a side business with great potential that will be immediately profitable and accretive to earnings.

DryShips CEO George Economou owns a 45% stake of the company so his interests are clearly driving up profitability in the company. Furthermore, by not selling any shares he is showing confidence in the business. Entering a side business may seem like a bearish sign, but for DryShips this simply translates into more earnings for shareholders. The company’s return on equity stands at a whopping 57%, signaling that management has a history of making effective investments.

Analysts at Jeffries last week came out with a buy rating and $160 price target, more than double the current price, citing that shares are trading at merely 3.6 times 2008 earnings estimates. Even the most cautious analysts have set targets above $100 a share. Even if a recession materializes, there is a baseline demand for shipping services that the shippers will benefit from.

Shares of the dry bulk shippers have all been beaten down as the Baltic Dry Index has taken a fall. The fundamentals for the industry remain very positive for the next few years and this is an excellent time to invest in the dry bulk shippers. In addition to the top players of DryShips and Diana Shipping, a few other options within the sector to look at include Quintana Maritime (QMAR), Excel Maritime Carriers (EXM), and FreeSeas (FREE).

Although there is an overhang of uncertainty clouding the judgment of investors, business will remain strong and the shippers will continue to generate massive profits. Expect the Baltic Dry Index to stabilize in the coming months and jumpstart the rally as sentiment towards the industry improves. In the face of a volatile stock market, your best bet to outperform the market is to stick with low P/E companies that aren’t properly valued, and the dry bulk shippers fit the mold

[jimmy c] 13/1/2008 14:20

might look at this for a short if the spread thins.

[tadtech] 13/1/2008 14:18

The share price of GOC seems to trend the BDI almost exactly. There have been a number of large trades since mid December and I wonder if it is a few Ins investors selling out, last weeks larger trades certainly seemed like sells.

I have reduced here when I started to see the BDI falling, on Friday there was coverage on CNBC of this index and the commentator was none too bullish.

I feel we could drop below £1 once again, as pointed out the dividend and very low PE should provide support in the 90's like before if this does happen.

I will be a buyer once again at this level (should it occur) as I have not forgotten the medium term potential here.

[apetley] 13/1/2008 13:43

Yes thanks for the input sp5.
Just getting a little cheesed off at this major downturn across the board.
Anyway, this time next year(or the next) we'll be millionaires.

[david77] 13/1/2008 08:25

Thanks for your re-assuring words, Simon.

[simonparker5] 13/1/2008 07:15

Apetley the whole dry bulk sector has been in melt down for the past three months. Just look at the baltic chart in the header. I follow alot of the american quoted dry bulk stocks and most of these are now valued at 30-40% of their peek prices only four months ago. For example Exel Marine is at $29.50 when it traded at $80 in September. As always markets are not rational and this massive sell off is due a correction soon.
With GOC having good forward contracts where we we can be sure of their earnings they are now also way under valued. If earnings come in for the year as predicted then they are on a PE of less than 5 with a divident yield of over 10%, crazy even for this current market turmoil.
However given the current market turmoil I doubt we will see the previous highs for a good while but somw sort of recovery has to happen soon.