I have to be brutally honest with you. This industry is simply the best place to put funds. The only impediment, which happens to be a big one, is that for many bulkers, it’s too little too late. They’ve amassed too much debt and will either go bankrupt or dilute. That’s why you own the stocks with good balance sheets, like BALT and DSX.
Let’s do some back of the envelope math for BALT, using current day rates. Remember, unlike other bulkers who opted for charter rates during a depressed market, BALT chose to stick with spot. They did this because their balance sheet was good and could afford to ride out the storm.
4 Capesize $33,475= $133,900
2 Ultramax $18,000= $36,000
4 Supramax $15,222= $60,888
5 Handysize $7,820= $39,100
Total= $269,888 per day.
Let’s extrapolate the $269,888 per day by the number of days in a quarter, shall we?
SURVEY SAYS: $24,289,920.
The company did $9 million in revenues last quarter. That’s 166% revenue growth, quarter over quarter.
What’s changed?
Aside from rates spiking, they bought two Ultramax and two Capesize vessels, adding another $9+ million in quarterly revenues in the process. Understand something, what’s transpiring right now is a best case scenario for the company, providing rates remain elevated. They are going to make a mint at current levels and their share price, without a doubt, is going to skyrocket.
Take the last sentence with some salt, as I am archly biased, talking my own book.
Nevertheless, just because I am talking my own book doesn’t mean it ain’t true.
Not that I want to shit all over you, but an analyst would be doing that over the course of 90 days and while it is X one day, the rate is definitely Y on another. A blended average is much more useful to the speculator. That said, your attention to this detail is most useful.
yes, I know. It’s back of the envelope and rates move daily. It’s a ballpark.
Fundamental analysis!
at 7x sales with this revenue trajectory, the stock will hit $15.
Long and strong with you, but I don’t believe they have all 15 ships yet and drydocking for repairs will begin Q4 and increase into Q1 next year.
Still, you’re on the money, since even if you halve the back of the envelope estimate you’re still talking about some impressive rev growth.
Perhaps BALT buying those new ships will pay off. I’d be surprised if the stock isn’t profitable for most of us by now. Let’s hope those rates keep going – I wanna see Fly’s cannons thunder and his enemies powder chested!
I’m holding until it gets back to it’s IPO price. Just take a look at the volume profile on monthly chart.
Understanding that this is back of the envelope, I don’t think both recently purchase capesize ships will be in service soon. I could be wrong, but I thought I read that at least the second cape won’t be delivered until sometime later in 2014?
I think your right. I thought they got one now and one later, then purchased 2 Ultra’s in 2014….
WRONG.
BALT took delivery of said Capes two days ago.
As you were.
Not both, just the Baltic Tiger.
Got me
Just don’t do a google image search for “capsize vessel.” Too depressing.
Onboard with this trade from $4.80. Giddy up.
You know they purchased 2 “capesize” ships, not “capsized” right?
Who wrote capesized?
The king floundered on the tingle worship show. Seriously. Scary. Zombie shit.
Senor Fly you must have an opinion. The markets are politics. What about the interview with the king?
Then again. Hustler Tv is the commercial between segments. No one is watching this shit.
It is official we are all incapable losers. Without Uncle Sam we are nothing. Big brother is everything.
ULTA take a swing long way down here