gaf63 Posted August 29, 2011 Share Posted August 29, 2011 Interesting, I recall CSAV, and Maersk trying to pull out of their contracts, but no remembrance of Cosco Link to comment Share on other sites More sharing options...
Uccmal Posted September 1, 2011 Share Posted September 1, 2011 Gaf, you may be right. Cant recall the situation very well. Link to comment Share on other sites More sharing options...
Uccmal Posted November 1, 2011 Share Posted November 1, 2011 Ssw earnings out. Another consistently good quarter. http://finance.yahoo.com/q?d=t&s=SSW Should bump the stock up a little. Link to comment Share on other sites More sharing options...
VAL9000 Posted November 1, 2011 Share Posted November 1, 2011 Ssw earnings out. Another consistently good quarter. http://finance.yahoo.com/q?d=t&s=SSW Should bump the stock up a little. I agree with your assessment on the quarter but I think the stock is going to get punished today. The MSC transactions are great solutions to the 25-year-old vessel problem, but they're recording a loss which doesn't look good. The interest rate hedges "look bad" on paper, too. And there was no dividend bump for this quarter. Not that they said they would increase it every 6 months, but it was on my list of hopefuls and others' too. The business continues to perform very well. If it gets around $12 then I will pick up some more, despite the overweight in my portfolio. Link to comment Share on other sites More sharing options...
Uccmal Posted November 1, 2011 Share Posted November 1, 2011 Agreed Val9000. My position size is about 10%. Would bump it to 15 if the price got down to 12 or so. Not expecting that but you never know. Last years div. Increase was 50%. Expect something along similar lines in the next q or two. As always, wont hold my breath if it doesn't happen on my schedule. Link to comment Share on other sites More sharing options...
VAL9000 Posted November 1, 2011 Share Posted November 1, 2011 Agreed Val9000. My position size is about 10%. Would bump it to 15 if the price got down to 12 or so. Not expecting that but you never know. Last years div. Increase was 50%. Expect something along similar lines in the next q or two. As always, wont hold my breath if it doesn't happen on my schedule. I'm listening to the earnings call right now. Sai (CFO) said that they will probably examine this on an annual basis going forward. My interpretation is that we'll probably see a dividend bump in six months. We should see another deal in place by the end of the year. I recall something about the Carlyle Group JV requiring Seaspan to pick up a minimum 50% of all vessels ordered through their JV, evaluated annually. The first order they took on 3 of 7 vessels, so they need to order at least 1 more by end of year. Link to comment Share on other sites More sharing options...
JEast Posted November 3, 2011 Author Share Posted November 3, 2011 Much like Fairfax of day past, every time a company’s management is proactive and does something to improve the balance sheet for the longer term, either the market ignores it or punishes the equity. Another case in point as Seaspan has been quite nimble over the last 3 years coming up innovative ways with and managing the balance sheet. With these recent moves to remove their (4) oldest ships from the fleet before the charters expire is quite beneficial. One, it removes the uncertainty in a tough re-charter market, and two, it frees up some capital for new builds that are surely coming. Of course, the downside is reduced revenue upfront which I assume the market is looking at currently. Though well known by now, this call was interesting in the fact all, or most, of the European shipping banks have or will be pulling in their capital. This bodes will for the ones that do have capital to buy bigger and more fuel-efficient ships. This is not a 10-bagger, but seems like a safe income producing equity for RRSP or a US IRA. Of note for taxable accounts, roughly 80% of the income received is treated as return of capital for US investors. Cheers JEast Disclosure: Full position again Link to comment Share on other sites More sharing options...
bathtime Posted November 30, 2011 Share Posted November 30, 2011 I haven't owned SSW before, but I know it's a favorite here. Is it cheap at these prices or does the micro macro uncertainty make it risky to own with its exposure to shipping? Thanks! Link to comment Share on other sites More sharing options...
Uccmal Posted December 1, 2011 Share Posted December 1, 2011 Bathtime, its cheap. Cheap as it has ever been relative to safety. It seems To trade off of shipping rates but that is not relevant to its earnings. It operates as a REIT, more or less- one of a kind. Suggest you review the posts and the link to posts from the past message board, and read the financials, before investing. Link to comment Share on other sites More sharing options...
Uccmal Posted December 13, 2011 Share Posted December 13, 2011 Well it was cheap. Still cheap according to the SSW managers and board: http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632786 Link to comment Share on other sites More sharing options...
Santayana Posted December 13, 2011 Share Posted December 13, 2011 Can anyone explain how tender offers work? If they are buying at $15, why would the price spike to $14 this morning, and then fall back into the 12s? Link to comment Share on other sites More sharing options...
VAL9000 Posted December 13, 2011 Share Posted December 13, 2011 Well it was cheap. Still cheap according to the SSW managers and board: http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632786 They also announced this, which is interesting: http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632783 Seaspan Corporation (NYSE: SSW) today announced that it has entered into a binding memorandum of understanding to acquire Seaspan Management Services Limited (the "Manager") in a stock-based transaction valued at $54 million This could open the door to non-financing revenue streams for SSW. Thinking of the Carlyle agreement, SSW will finance, operate, and charter roughly half of the vessels taken on by the Carlyle vehicle. The other half, while financed and chartered externally, will still require operations. The obvious candidate for running these ops is SSW, but they will need to change their model to support this. They will require a method of selling and servicing operations and this purchase gives them that method. Gerry Wang, CEO, is leaving Seaspan in about a year. Gerry is credited with putting together the deals that fueled Seaspan's growth. The growth-oriented CEO is out and the operations-oriented business is in. Thinking out loud... this could be a transition back to the high dividend/MLPish structure from a few years ago. Link to comment Share on other sites More sharing options...
Uccmal Posted December 13, 2011 Share Posted December 13, 2011 Can anyone explain how tender offers work? If they are buying at $15, why would the price spike to $14 this morning, and then fall back into the 12s? No idea... But it looks like an arbitrage opportunity to me. If I can scare up some cash to buy some shares to tender that would be nice. They are reducing the share count by around 15%. So the dividend will be less in total, spread among fewer shares. As per your comments Val, it looks as though the big growth phase is over, which should leave alot of cash for dividends. Link to comment Share on other sites More sharing options...
gaf63 Posted December 13, 2011 Share Posted December 13, 2011 Just yesterday the FT had a full page on the woes of the shipping industry, values of ships declining and banks calling in loans, foreclosures of more cos., etc., so this was great news this morning Will bring the fully diluted share count to the mid 80 millions after purchase of the mng. co. , and halve their cash on hand , which tells me they are not worried about the financing of the last 3 ships in 2012(hopefully a correct assumption). Trading in SSW this morning is perplexing after this news tho Link to comment Share on other sites More sharing options...
alertmeipp Posted December 13, 2011 Share Posted December 13, 2011 lousy way to spend cash IMO. Link to comment Share on other sites More sharing options...
VAL9000 Posted December 13, 2011 Share Posted December 13, 2011 I can't explain the price fluctuations, but the only sensible guesses I could come up with are: - The tender offer of $15 will only apply to 10mm shares, so there is risk that you won't get this price if you bought today, hence it wouldn't hover at $15. - It could be that after a price decline of $20 to $10.xx a lot of people had limit sells between $11 and $14, which would have been triggered this morning. - Some people could just be exiting after getting in over the past few weeks at < $11. Good trade. Link to comment Share on other sites More sharing options...
manualofideas Posted December 13, 2011 Share Posted December 13, 2011 It seems less than optimal that the company would pay $15 per share. They could probably buy back shares for a lot less if they just spread out the buyback over a few months. We wonder if there is a back-story to this. Could it be that one of the large shareholders margined their stake and now needs to meet margin calls. A short-term pop would greatly alleviate any pressure from margin calls even if such a pop is not optional for the company over the long term. It would be good to understand the real reasons behind this seemingly unnecessary tender at a huge premium to market. Link to comment Share on other sites More sharing options...
VAL9000 Posted December 13, 2011 Share Posted December 13, 2011 It seems less than optimal that the company would pay $15 per share. They could probably buy back shares for a lot less if they just spread out the buyback over a few months. We wonder if there is a back-story to this. Could it be that one of the large shareholders margined their stake and now needs to meet margin calls. A short-term pop would greatly alleviate any pressure from margin calls even if such a pop is not optional for the company over the long term. It would be good to understand the real reasons behind this seemingly unnecessary tender at a huge premium to market. It could have to do with the $54mm stock buy-out of the management firm that they also announced. $54mm in $10 shares is more costly than $54mm in $15 shares. Not sure that's enough to do it, though. I agree that it's an odd way to approach a buy-back. Does anyone have other examples of buy-backs that are similarly structured? Link to comment Share on other sites More sharing options...
VAL9000 Posted December 13, 2011 Share Posted December 13, 2011 It seems less than optimal that the company would pay $15 per share. They could probably buy back shares for a lot less if they just spread out the buyback over a few months. We wonder if there is a back-story to this. Could it be that one of the large shareholders margined their stake and now needs to meet margin calls. A short-term pop would greatly alleviate any pressure from margin calls even if such a pop is not optional for the company over the long term. It would be good to understand the real reasons behind this seemingly unnecessary tender at a huge premium to market. I saw a decent explanation for the tender offer on the Yahoo board: Look at average daily volume for the last 3m. It is 270,000 so if they want to buy 10,000,000 shares without affecting the price that much they need to buy about 10-20% of the daily volume each day. So to buy 10m shares they will need entire year of daily buying (I the mean time they have to pay dividends on these shares). It is much easier, faster and might be actually cheaper just to buy them in one block. Link to comment Share on other sites More sharing options...
Santayana Posted December 13, 2011 Share Posted December 13, 2011 I can't explain the price fluctuations, but the only sensible guesses I could come up with are: - The tender offer of $15 will only apply to 10mm shares, so there is risk that you won't get this price if you bought today, hence it wouldn't hover at $15. - It could be that after a price decline of $20 to $10.xx a lot of people had limit sells between $11 and $14, which would have been triggered this morning. - Some people could just be exiting after getting in over the past few weeks at < $11. Good trade. Will be interesting to see how it trades over the next few days. If they announce another div raise this spring, $15 might seem pretty cheap. I'm glad I added to my position last week instead of waiting any longer. Link to comment Share on other sites More sharing options...
lessthaniv Posted December 13, 2011 Share Posted December 13, 2011 I can't explain the price fluctuations, but the only sensible guesses I could come up with are: - The tender offer of $15 will only apply to 10mm shares, so there is risk that you won't get this price if you bought today, hence it wouldn't hover at $15. - It could be that after a price decline of $20 to $10.xx a lot of people had limit sells between $11 and $14, which would have been triggered this morning. - Some people could just be exiting after getting in over the past few weeks at < $11. Good trade. Will be interesting to see how it trades over the next few days. If they announce another div raise this spring, $15 might seem pretty cheap. I'm glad I added to my position last week instead of waiting any longer. Seems cheap now. If they get the tender of 10M and cancel those shares you'll have the current dividend pouring over a smaller share count. I have no plans to tender though ... but I sure there are lots of traders who would. I think it's cheap at $15 especially with a bump in dividend/share assuming those shares are cancelled. Link to comment Share on other sites More sharing options...
finetrader Posted December 14, 2011 Share Posted December 14, 2011 the float is 50m shares. So if Seaspan buy 10m shares you can expect that you will be able to sell 20% of your shares at 15$. The premium is 43.5% over the december 12 2011 closing price , so you can expect a gain of 0.20*0.47%=9.4% So the arbitrage price is about 10.45$*1.094=11.43$ , add another premium for the awareness of the market that management think that the 10.45$ was too low and this will get you to today's closing price of 12.16$. Link to comment Share on other sites More sharing options...
Uccmal Posted December 14, 2011 Share Posted December 14, 2011 the float is 50m shares. So if Seaspan buy 10m shares you can expect that you will be able to sell 20% of your shares at 15$. The premium is 43.5% over the december 12 2011 closing price , so you can expect a gain of 0.20*0.47%=9.4% So the arbitrage price is about 10.45$*1.094=11.43$ , add another premium for the awareness of the market that management think that the 10.45$ was too low and this will get you to today's closing price of 12.16$. Brilliant! Link to comment Share on other sites More sharing options...
alertmeipp Posted December 14, 2011 Share Posted December 14, 2011 so 150m spent to buy 10m shares .... and mark to market loss of above 30m right after all said and done, brilliant. pps will probably drift downward soon after.. why not just a normal bid issue. Link to comment Share on other sites More sharing options...
Uccmal Posted December 14, 2011 Share Posted December 14, 2011 so 150m spent to buy 10m shares .... and mark to market loss of above 30m right after all said and done, brilliant. pps will probably drift downward soon after.. why not just a normal bid issue. I was referring to finetrader's working out of the stock price, not SSW buying shares back at $15. Link to comment Share on other sites More sharing options...
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