About a year ago I went long about 1 million shares of FRO, thinking the shippers bottomed. I was half right. The place to be was Dry Bulk, not over leveraged oil tankers, as evidenced by share price performance. FRO has under-performed because they are being squeezed and may file for reorganization, which is why I sold.
After reexamining the space and trends, I knew the correct trade was in Dry Bulk. I’ve posted my picks inside of The PPT for months: DSX, SBLK and GNK.
Tonight, the BDI is going haywire to the upside.
This hurts.
The best performing Dry Bulk plays are GNK, FREE, EGLE, SBLK and DRYS.
I expect this run to continue, as rates normalize, so will valuations.
Some ideas worth thinking about are the laggards. You want to take a shot at laggards, but not underperformers.
There are some really leveraged plays out there, with dangerous debt/equity levels. If the sector is really turning, the higher the leverage, the better–just like olde FTK.
The highest levered shippers are
FREE (89)
EGLE (13)
GNK (9)
SHIP (9)
DAC (7)
FRO (6.5)
TNP (5)
DRYS (4)
Based on price to sales, the following are the cheapest (this is providing they do not declare)
FREE (0.07) –this is pretty much insolvent
OSGIQ (0.08)– already in reorg
FRO (0.36)
EGLE (0.41)
SHIP (0.46)
ISH (0.66)
TNP (0.70)
SBLK (0.76)
DHT (0.78)
My best guess, next big winners, are:
EGLE, SHIP, SB, BALT and maybe GBLS. Obviously, GNK can go much higher; but I refuse to buy it up here.
PPT users can access my screen here.
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… and the trannies usually lead the market higher! (missed it too!)
really kicking my ass for missing NOAH and FN also… both buried on too deep a watchlist…. (old farts like me should learn to keep it simple)
had some grins over CSCO, EMES, NXST, NCR, LAD AEL and RAS.
Tomorrow is another day… still 20% cash… good luck to all… watch yer backs!
BTW… I nibbled 1000 SNTS as it passed 21.65 on the way up today… I think this is a real bargain down here… sensible stop at 20.35 though. good night!
Never did sell out of FRO. Put that in the IRA and hope it’s another FTK in the making.
Fly you are like a magician, turning critics to crickets.
What about the housing play? Everything that died early this year is trying a comeback. Any view on rates?
Is the pink slips for the brokers a problem? That one is a bit confusing. Playing a bounce with OA in the builders. Why are the banks firing squad the paper pushers?
SEA is and has been on the 52 wk high list of late.
i snagged NMM in the low 12’s last november. Staying in a trade for long term tax status while keeping an eye on profit is difficult at times.
they’re all rolling over today – what happened?