The Board of Frontline Ltd. (the “Company” or “Frontline”) announces that it has agreed to acquire the VLCC “Front Vista” (the “Vessel”) from Ship Finance International Limited at a purchase price of USD 58.5 mill.

Frontline has furthermore agreed to sell the Vessel and the Buyer will settle the purchase price through the payment of instalments over a 10 year period. The Buyer has secured a 10 year time charter with a State owned oil company at a gross rate of USD 43,500 per day during the entire charter period.

The transaction reflects the Company’s goal of securing long term coverage for parts of its fleet.

I am not certain who is collecting the $43k per day: Frontline or the buyer? Hope Ship Finance made out OK as I own stock in SFL.

OK, just got the email from Ship Finance, here is a exerpt:

Ship Finance will receive net proceeds of approximately $22.1 million after prepayment of associated debt. The sale is expected to result in a book gain on sale of assets of approximately $1.8 million.

For the year, on an equal dollar basis, the average share price gain for the 42 shipping stocks was 6.53%. Dividends tossed in another 2% putting the total gain at about 8.5%. For comparison, the DJIA was up 18l.8% for 2009 and the S&P 500 gained 23.5%. The list of shippers was evenly split between gainers and losers, 21 each. The shippers that continue to pay dividends performed significantly better with an average share price gain of 15.25% and the dividends paid by these companies added another 15% based on the share values at the beginning of 2009.

The top 3 shipping stocks were:

• Navios Maritime Partners NMM +107%
• Navios Maritime Holdings [[NM]] +91.5%
• Golar LNG Limited GLNG +89.6%

NMM also threw in over $1.60 per share in dividends on a share price that started the year at $7.14!

Here are the three bottom shipping stocks:

• Ocean Freight [[ONCF]] -69%
• Omega Navigation ONAV -51%
• Global Ship Lease GSL -50%

Also of note near the bottom of shipping stocks if former crowd favorite DryShips, which managed to lose 45% of its stock value in 2009.

2008 and 2009 brought a lot of changes to the shipping industry. Conservative players were able to enhance the value of their assets while the highly leveraged crowd mostly ended up highly diluted and still with large debt loads that must be serviced with ships earning lower rates.

My plans for this site in 2010 is to be mostly focused on stocks that pay dividends. That is my prime interest. I will be adding analysis of other high yield stocks into the mix.

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:

• Paragon Shipping PRGN
• Net income: $15 million/33¢ vs. $14.6 million/ 54¢
• Shares outshanting: 44.7 million vs. 27 million
• TCE $34.7k vs. $40.2
• Daily expenses per vessel: $5983 vs. $8365 – Nicely done!
• 5¢ dividend
• 100% contracted for 2010, 90% for 2011 – Revenues should be stable at current level

• Ocean Freight ONCF
• Net: $9.5 mil/11¢ vs. $8.9 mil/61¢
• $20 mil loss on sale of vessel pushes results to 15¢/share loss
• Shares outstanding: 90.4 million vs. 14.6 million!!!!!!

• TopShips TOPS
• Net income 1¢ vs. $1.44 per share
• Revenue: $25 mil vs. $71 mil
• Debt of $407 million in breach of loan covenants
• This one is $1.00 per share and going under!

• Eagle Bulk Shipping EGLE
• Net income: $3.9 million/6¢ vs. $23 million/49¢
• 62 million shares vs. 47 million
• Revenues $41.5 mil vs. $51.5 mil
• Interest expense: $10.6 mil vs. $3.3 mil
• Eagle is still growing their fleet and debt. I would like to see more cash getting to the bottom line.

• Safebulkers SB
• Net income $22.2 mil/41¢ vs. $39.2 mil/ 72¢
• TCE $30k vs. $52.7k
• declared 15 cent dividend
• 86% employed for 2010, 59% for 2011

• Diana Shipping DSX
• Net income: $28.7 mil/ 36¢ vs. $57.6 mil./ 77¢
• Revenue: $58.2 mil. vs. $87.4 mil.

• Excel Maritime EXM
• Net income: $62 mil/79¢ vs. $117.6 mil/$2.66
• TCE $22k vs. $34k
• 54% employed for 2010
• Shares: 78.9 million vs. 44.2 million

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.

Through 10/22 the shipping stocks are up 16.68%. The S&P 500 is 21% above where it finished 2008. A buyout offer from OSG has madeThe top shipping stock has been OSG America L.P. OSP the top shipping stock up 107%. Worst performer has been OceanFreight Inc. which has shed almost 64% of its value in 2009. Hard to believe this stock was $28 per share two years ago.

Winners and loser are close to even with 24 stock in positive territory for 2009.

Earnings season for the shippers starts up next week, so this will be a good time for me to jump back into these stock and catch up on their individual situations. Stay tuned.