Several shipping stocks are presenting at the JPMorgan Aviation & Transportation Conference today and I am listening to the presentations as they come up (delayed). I will put up a few notes on the companies I listen to:
Horizon LinesHRZ is the largest of the Jones Act shippers moving containerized cargo from the States to Alaska, Hawaii, Guam and Puerto Rico. Here is the list of why the company says they are well positioned going into 2009:
Domestic trade is more stable than international trade
Serve the basic needs of our trade lanes
Strong, longstanding customer relationships
Stable financial position – no recapitalization needed until 2012.
What I noticed is that HRZ generated $60 million in free cash flow in 2008 and has a market cap of $87 million. Amazing! The presentation had a net positive rate of growth of 2.2% for 2009.
Genco Shipping and TradingGNK You have to love a company that earns $35k per day at an operating expense of $5k per day, or not. Got to pay the interest on $1.4 billion revolving credit facility. Also, it would be a good idea to keep those ships working at the same high rates. Throw in the interest and general expenses and the per day expense per ship are about $13,200 per day. I still see Genco as a company that has 3 new Capesize coming later this year plus a 1/3 of their fleet coming off longer term leases. This is a company that really needs the global manufacturing economy to really pick up.
Ship Finance Ltd.SFL “Cash flow in exceeds cash flow out” pretty much sums up the philosophy of this company. It is unbelievable that this company has only a $350 million market cap. The company has $7 billion in net charter payments coming on there long term charters. There was an interesting chart during the presentation: Net cash flow after interest and debt amortization was 93¢ per share, easily covering the 30¢ dividend. SFL made large amounts of capital investments ($2.6 billion) in 2008 and in 2009 hopefully these investments will start producing increased cash flow and dividends.
Eagle Bulk Shipping EGLE is committed to their focus on the supramax market. The speaker was strongly positive about the positioning and prospects for his company. EGLE has a large newbuild program but has 80% of those ships with already committed charters. They have a very interesting chart on the cost of their new build contracts. They will be buying the ships at prices near the current value, not at the recent inflated values of ships of this class. Plenty of other interesting items in this presentation. Eagle Bulk has my attention.
There are my notes of 4 of the presentations. There are more to come, but I thought I should get this up for the weekend.
JPMorgan Aviation & Transportation Conference highlights
Several shipping stocks are presenting at the JPMorgan Aviation & Transportation Conference today and I am listening to the presentations as they come up (delayed). I will put up a few notes on the companies I listen to:
Horizon Lines HRZ is the largest of the Jones Act shippers moving containerized cargo from the States to Alaska, Hawaii, Guam and Puerto Rico. Here is the list of why the company says they are well positioned going into 2009:
What I noticed is that HRZ generated $60 million in free cash flow in 2008 and has a market cap of $87 million. Amazing! The presentation had a net positive rate of growth of 2.2% for 2009.
Genco Shipping and Trading GNK You have to love a company that earns $35k per day at an operating expense of $5k per day, or not. Got to pay the interest on $1.4 billion revolving credit facility. Also, it would be a good idea to keep those ships working at the same high rates. Throw in the interest and general expenses and the per day expense per ship are about $13,200 per day. I still see Genco as a company that has 3 new Capesize coming later this year plus a 1/3 of their fleet coming off longer term leases. This is a company that really needs the global manufacturing economy to really pick up.
Ship Finance Ltd. SFL “Cash flow in exceeds cash flow out” pretty much sums up the philosophy of this company. It is unbelievable that this company has only a $350 million market cap. The company has $7 billion in net charter payments coming on there long term charters. There was an interesting chart during the presentation: Net cash flow after interest and debt amortization was 93¢ per share, easily covering the 30¢ dividend. SFL made large amounts of capital investments ($2.6 billion) in 2008 and in 2009 hopefully these investments will start producing increased cash flow and dividends.
Eagle Bulk Shipping EGLE is committed to their focus on the supramax market. The speaker was strongly positive about the positioning and prospects for his company. EGLE has a large newbuild program but has 80% of those ships with already committed charters. They have a very interesting chart on the cost of their new build contracts. They will be buying the ships at prices near the current value, not at the recent inflated values of ships of this class. Plenty of other interesting items in this presentation. Eagle Bulk has my attention.
There are my notes of 4 of the presentations. There are more to come, but I thought I should get this up for the weekend.
Note: I own a personal position in SFL.