Tufton Assets Share Discussion Threads

[jonwig] 08/3/2019 17:31

Ah - good skill and good luck!

[roman2325] 08/3/2019 16:48

Shipping's a chancers game - that's why I'm in it :)

[jonwig] 08/3/2019 16:35

No, and won't be. I think I'd leave this to the professionals who know the market - you've given me enough reasons to pass it by. Also trading is thin to non-existent: easy to get caught out by sellers close to the action.

[roman2325] 08/3/2019 16:31

What are your thoughts Jonwig? Are you in this?

[jonwig] 08/3/2019 14:13

roman - standard legal disclaimer found on all company documents. Covers them if their ships are sunk by death rays from planet Zog, etc.

[roman2325] 08/3/2019 13:56

So in the last announcement the company said:

"The Company's capital resources are now fully committed. This investment will increase the Company's operating cash flow post fees and post capex to a level that will cover the Company's stated 7% target dividend* by over 1.7x. It will also increase the Company's average charter length."

The company 2 seconds later said:

*This is a target only and not a profit forecast. There can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the Company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable. The target dividend yield is based on the IPO issue price of US$1.00 per ordinary share.

Pleasing to see they read this Bulletin Board ;)

[hpcg] 06/3/2019 13:08

People are protected through not being able to buy it. I have multiple nominee accounts and I don't think any carry it.

[roman2325] 25/2/2019 10:14

You make money in shipping buying and selling vessels - the industry was flooded post crisis with funds thinking they would buy at the bottom and sell at the top - the same players are STILL ordering more ships thinking its STILL at the bottom and waiting for a recovery - you have everyone on the same side of the trade flooding the market with supply - if no one is willing to take a loss then the market will never go up!

Its shocking this fund came to market - its absolute robbery. Reckoning it will increase 12% a year, pay out 7% or whatnot, its absolutely impossible to predict figures like that moving forward. Like trying to predict the weather in 2020 - should be warning signs all over this

[roman2325] 25/2/2019 10:08

Morning Jonwig - here's an article from a Journal out this morning:

BDI’s decline second worst ever
FEBRUARY 25TH, 2019 Sam Chambers SAM CHAMBERS DRY CARGO 0 COMMENTS
The decline in the Baltic Dry Index (BDI) this year is the worst on record, with the exception of the calamitous drop in the wake of the collapse of Lehman Brothers 11 years ago, according to data from Alphabulk, part of AXS Marine.

Alphabulk analysed the severity of the drop via percentage changes in the BDI over five- and 10-day periods as well as looking at volatility within the index.

Using the three-month trailing annualised standard deviation of daily returns of the BDI shows that excluding the first half of 2009, the volatility experienced at the end of January is the highest ever recorded, recently going higher than 60%.

The Vale dam disaster and Chinese new year have regularly been cited as key reasons for the fall, but Alphabulk believes there are more fundamental at issues at play.

Meanwhile, Drewry Maritime Financial Research has issued a new dry bulk report in which it notes that five of the dry bulk shipping stocks under its coverage delivered a negative return of 24.4% in 2018. Moreover, the dry bulk shipping stocks under Drewry’s coverage are down 13.2% since the start of 2019.

Cleaves Securities’s latest weekly report shows that there has been no respite for capesize owners in the past seven days. Cape spot rates have fallen below opex and to the lowest levels in more than two years, Cleaves noted. Splash has seen spot rates for as low as $3,000 a day being banded around.

Ending on a hopeful note, Cleaves concluded: “We still believe that the current weakness represents the intra-year low for 2019, and forecast dry bulk spot rates to average 140% higher in 2Q19.”

The BDI closed on Friday at 634 points, having slid to below 600 points earlier in the month.

[jonwig] 21/2/2019 10:44

roman - I left it alone because I don't understand the market. The BDI is signalling bad news, I suppose that's relevant.

Maybe everything has its price, and if they can pick up ships dumped at a low price and wait on the next upswing? Not for me, certainly!

[masurenguy] 07/2/2018 00:07

Focusing upon an interesting niche market with potentially an excellent yield !

Earn a steady income from ships

Just before Christmas a Guernsey-based fund called Tufton Oceanic Assets (LSE: SHIP) launched on the London Stock Exchange, marking a real first for London – a chance for investors to make an income by renting out ships. Investors have long been able to invest in shipping giants such as Maersk or Hapag-Lloyd. But these are cyclical trading businesses, rather than ones focused on producing a steady dividend stream. In the UK, it has been possible to invest in a few small ship-owning companies under the Enterprise Investment Scheme (EIS), but there were no shipping investment trusts.

This is a pity, because there’s much to like about the market. Like aeroplanes, ships produce a steady stream of rental or lease payments, and the market in shipping rentals is huge and very liquid, with many reliable, creditworthy customers. On the downside, its cyclical nature means the market is prone to bouts of oversupply, with prices collapsing as a result – as they did for the Baltic Dry index (which charts the cost of transporting raw materials) after 2008.

But unlike many other asset-backed markets, grabbing hold of delinquent assets in a slump isn’t hard – repossessions have been going on for hundreds of years, and there is a very liquid market in new rentals for the ship owner. And as with any cyclical market, there’s always the potential for an upturn – indeed, we may be seeing one right now. The Baltic Dry has risen by around 60% over the past five years. The global economy is humming, helped by a strong US and China. Cargo rates have stabilised, and shipyards are relatively less busy – the global order book for new ships is at a 20-year low, and shipyard capacity has shrunk by 16% since 2012.

An established player

Tufton is an established player in the second-hand ship market, managing around $1.5bn across a variety of funds. It tends to target product tankers, bulk-cargo ships and smaller container ships. The vessels themselves might be anything from five- to 20-years old, trading at between 30% and 70% of their new value, while customers charter them for between two and ten years. As with aeroplanes, sale-and-leaseback deals are common – a big operator sells their new ship to a funding vehicle such as Tufton, then leases it from them. This leaves the finance outfit to deal with the hassle of the final residual value, or resale value. This is where the real profits are made – by buying second-hand ships cheaply, and making sure the residual value is as high as possible.

Tufton maintains that now is the right time to buy. Certain types of ship are still quite cheap to buy, but rental rates are rising alongside the economy. This upturn isn’t being swamped (yet) by a sudden spike in new ship construction. Tufton reckons it can pay out 7% per year (5% in the first year), with an overall internal rate of return (a measure of project profitability) – including capital gains – of 12%. Tufton’s existing institutional fund has made a total return of 12.5% since 2015.

The risks are clear (which is why the fund is floated on the specialist market, aimed at institutions and sophisticated investors). Shipping is cyclical and, in a downturn, residual values could plunge, and rental yields dry up. The fund is also dollar-denominated, which introduces currency risk. Yet as part of a diversified portfolio, this is an excellent source of alternative income, with real asset backing and steady income streams.

[belgraviaboy] 26/1/2018 12:54

Featured in Moneyweek today

[sailor steve] 11/1/2018 23:00

A word of caution to income seekers. Shipping is a highly cyclical business, boom and bust within every decade.

[jonwig] 04/1/2018 07:21

Citywire comment on SHIP:



Could be interesting, when I have some free USD.

[lord gnome] 31/12/2017 17:26

A new thread for a new Investment Trust in a new (to me) specialist area. If they are chasing a 7% yield and a total return of 12% per annum, I can see this appealing to income seekers. It is also priced in US$ so it will provide a currency hedge against the GB£. It certainly floats my boat.

[lord gnome] 31/12/2017 17:21

!FOLLOWFEED
Quote (Investors' Chronicle, 29 Dec 2017):
Tufton Oceanic Assets (SHIP) has raised $91m, slightly lower than its $100m target, and began trading on the Specialist Fund Segment of the London Stock Exchange on 20 December. The trust is targeting a 12 per cent a year NAV return with a cash distribution of 5 per cent in its first year and 7 per cent thereafter. It will invest in second-hand commercial sea-going vessels spread across the core segments of shipping.

"There is currently an attractive opportunity in shipping to buy assets at a significant discount to their depreciated replacement cost and lock in long-term employment producing mid-teen cash yields," says Andrew Hampson, head of asset-backed investments at the trust's manager, Tufton Oceanic. "This is a strategy we've been following with success for the past couple of years and see limited competition due to the lack of capital currently being invested in shipping."

Tufton Oceanic has invested over $1bn in shipping assets over the past few years.

Company web site: hxxp://www.tuftonoceanicassets.com/

[pomp circumstance] 01/7/2014 14:09

something here?

hxxp://www.investmenttools.com/futures/bdi_baltic_dry_index.htm#bdi_tenyear

[hyper al] 29/6/2014 10:30

Almost two years on and Im asking the same question as in the last post.

[pomp circumstance] 01/9/2012 16:15

I want to stick a lump in some sort of fund with high exposure to the BDI. ANyone know how? Im counting on one spike in the next 20 years. TIA

[giant steps] 14/3/2012 19:39

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[giant steps] 14/3/2012 19:39

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[giant steps] 14/3/2012 19:39

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