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Strategies & Market Trends : Value Investing
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To: Dan Meleney who wrote (37329)4/10/2010 12:41:03 PM
From: Walter Bagehot  Read Replies (1) of 78717
 
Think of it this way:

A 5yr old Cape vessel has fallen in value from $150m to $50m

FREE:

$274m fixed assets = $90m today at the extreme (before we get the newbuilding orderbook delivered in full across the industry)
Debt = $138.5m
Commitments on newbuildings: unknown

Net Current Assets = -13

And, shareholders have been diluted this year (was it a capital raise or a sale of treasury shares, and where has the cash gone?)

All in all, a very bad balance sheet.

Earnings:

Dire. I don't know if they are on spot charters or not, but it is generating only $500k of earnings p.a., with rates heading down if supply continues to exceed demand.

Cashflow has turned negative as well, which is crucial for the debt position.

Now...if it had no debt, and I was holding for 3 years, and the management was kosher, I might agree with you on it being a value investment.
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