After reading through the earnings report of a bunch of drybulk and dry/tanker mixed fleet companies, I came to realize they are all suffering from the same symptoms and the ways they are handling the problem are not good for shareholders. The problem of seriously falling revenues has squeezed net income even harder, compounded by share dilution as the companies flood the market with cheap shares to raise cash to pay down debt and stay in business.
I did not spend much time reading when the 2nd quarter results came out, so these comparisons are for Q3 2009 against Q3 2008, just as the shipping meltdown was commencing. However, share prices for many of these stocks have recovered smartly over the last 6 months and I am wondering if the current valuations are justified. I have not looked at share price for this article, just dug out the financial numbers. Here are some telling numbers for several of the dry bulk shipping stocks:
For those of you new to shipping, TCE is time charter equivalent, or how much the company earned per day/per vessel.
With shipping rates under pressure from new vessels coming onboard plus the high debt loads of these companies, any investor should take a close look at the stock valuations. I would not be surprised to see a serious pullback in the share prices of the dry bulk shippers.
Quarterly results overview for drybulk earnings
After reading through the earnings report of a bunch of drybulk and dry/tanker mixed fleet companies, I came to realize they are all suffering from the same symptoms and the ways they are handling the problem are not good for shareholders. The problem of seriously falling revenues has squeezed net income even harder, compounded by share dilution as the companies flood the market with cheap shares to raise cash to pay down debt and stay in business.
I did not spend much time reading when the 2nd quarter results came out, so these comparisons are for Q3 2009 against Q3 2008, just as the shipping meltdown was commencing. However, share prices for many of these stocks have recovered smartly over the last 6 months and I am wondering if the current valuations are justified. I have not looked at share price for this article, just dug out the financial numbers. Here are some telling numbers for several of the dry bulk shipping stocks:
For those of you new to shipping, TCE is time charter equivalent, or how much the company earned per day/per vessel.
With shipping rates under pressure from new vessels coming onboard plus the high debt loads of these companies, any investor should take a close look at the stock valuations. I would not be surprised to see a serious pullback in the share prices of the dry bulk shippers.