Tuesday, October 28, 2014

Scorpio Bulkers Inc. - A Buying Opportunity With Some Strings Attached

  • Scorpio Bulkers has lost more than 50% or $700 million in market value since its IPO
  • SALT is adequately capitalized to meet its funding requirements in 2015.
  • Current share price represents a 100% profit potential over the next 12 months.
  • But risk of dilutive offerings to bridge equity gap in 2016 remains.

This year has been very grueling for shareholders of Scorpio Bulkers Inc. (SALT). The dry cargo shipping start-up spent most of 2013 and the beginning of 2014 like a drunken sailor, ordering 80 new-building vessels while raising a staggering $1.2 billion in equity. Its audacious fund-raising culminated with an oversubscribed IPO last December at $9.75 per share.

About three months after its market flotation the company’s shares started a gradual decline below its IPO level. Since the beginning of September the decline has been almost precipitous. On October 15th its shares briefly traded at an all-time intra-day low of $4.00 per share.

The stock price has rebounded since then but only so slightly. Last Thursday it closed at $4.72 per share. It is amazing to think that Scorpio Bulkers has lost almost $700 million in market capitalization since its IPO. Especially since the company has only taken delivery of one new-building vessel during the same period. Has the stock market overreacted to an admittedly very weak spot freight market? Has Scorpio Bulkers become a deep value play? What is the risk-reward profile for first time investors? In this article I hope to shed some light to all these questions...

Continue reading the article published on Seeking Alpha Pro.

Wednesday, July 30, 2014

Baltic Trading Limited Results for 2014-Q2

This estimate was as close to the actual results as it could be.

Baltic Trading Limited Announces Second Quarter Financial Results
Declares $0.01 per Share Dividend for Q2 2014
NEW YORK, July 30, 2014 /PRNewswire/ -- Baltic Trading Limited (NYSE: BALT) ("Baltic Trading" or the "Company") today reported its financial results for the three and six months ended June 30, 2014.

The following financial review discusses the results for the three and six months ended June 30, 2014 and June 30, 2013.

Second Quarter 2014 and Year-to-Date Highlights

Declared a $0.01 per share dividend payable on or about August 21, 2014 to all shareholders of record as of August 14, 2014 based on Q2 2014 results; and
Recorded a net loss of $5.7 million, or $0.10 basic and diluted net loss per share for the second quarter.
Financial Review: 2014 Second Quarter

The Company recorded a net loss for the second quarter of 2014 of $5.7 million, or $0.10 basic and diluted net loss per share. Comparatively, for the three months ended June 30, 2013, the Company recorded a net loss of $4.6 million, or $0.19 basic and diluted net loss per share.

EBITDA was $1.0 million for the three months ended June 30, 2014 versus $91,000 for the three months ended June 30, 2013.

John C. Wobensmith, President and Chief Financial Officer, commented, "During the second quarter, we continued to implement our fleet deployment strategy that provides the ability to drive future performance upon improvement in the prevailing freight rate environment. For the second quarter, we declared a dividend of $0.01 per share, increasing the cumulative dividend declared by the Company to $1.11 per share since going public in March 2010....

Monday, March 17, 2014

The Saga of Genco Shipping & Trading Continues, But the End Is Nearer

Genco Shipping & Trading Limited (GNK) has been on a death row since its admission last month that it had missed an interest payment and had negotiated a 30-day default waiver with its lenders. With the 30-day deadline fast approaching on March 18th, the company disclosed today that it was also not going to file its annual report on time. While failing to file a timely annual report is the least of the company’s concerns at this stage, it is important to note two additional disclosures made in today’s filing with the SEC.

First, the company’s annual report may include a going concern uncertainty disclosure. This should not come as a surprise to anyone since Genco has been classifying its debt outstanding (at the parent level) as current since March 31st, 2013.

Second, the company provided preliminary estimates for last year’s results on a consolidated basis. Despite an estimated operating loss of $67 million and a total loss of $157 million for the year, the company was able to generate approximately $4 million profit from operations during the fourth quarter of 2013.

This is the first time Genco is generating a quarterly operating profit in two years. Unfortunately it may come as too little too late for its shareholders.

Given its fast deteriorating cash balance, it is very likely that Genco will seek court protection from its lenders as early as this week.

But not all may be lost for shareholders. As I analyzed in my recent Seeking Alpha Pro article, while the company’s capital restructuring is inevitable, improving freight markets and asset values may still leave existing shareholders with a piece of the company’s new equity.

Tuesday, February 25, 2014

Shipping Preferred Shares

I recently had the opportunity to publish a detailed survey of shipping preferred shares on Seeking Alpha. Shipping companies have been busy issuing preferred shares as a way to raise equity funds without diluting common shareholders. 

Whether preferred shares are a one-time hit wonder or a permanent trend remains to be seen. But there has been a critical mass of these securities to warrant monitoring & follow-up. In the table below, I intend to update all pertinent information on existing shipping preferred shares, as well as new issues. 

I welcome your feedback on what information you would like to see and of any preferred shares I might have missed / should include in my survey.