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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: thatsnotluck who wrote (47072)	3/16/2012 1:34:19 PM
From: E_K_S	Read Replies (1) \| Respond to of 78767

Hi thatsnotluck - I believe the SFL SDRL loans were paid off and/or sold back to Fredricksen and his holding company (there was a clause typical of a lot of their contracts where the asset can be sold and/or loan paid off w/ special minimum profit payments to SFL). I believe the SDRL loan and/or the asset was sold w/ loan paid off back to SDRL w/ some type of equity financing. SFL made money on the deal but just not as much if they kept the loan in tact. It did impact their cash flows but LT debt was reduced too. As long as Fredricksen maintains a large equity position in the company (ie SFL) his interests are in line w/ mine as a shareholder. But you are right, there can be a conflict of interest especially if he sells a portion of his SFL shares and/or starts that new (rumored) FRO_2012 private company and does not allow SFL to do some of the financing. FWIW, I was an early shareholder of DRYS and that CEO did not have the shareholder's interests in mind at all (IMO). Shares were diluted and under the table deals were done that confiscated my equity even though the company was creating value. However, the only value it was creating was for the CEO. Then when rates dropped and the company almost went BK, the CEO pocketed even more money while the shareholders were left holding the bag. So, I guess it's a matter of perspective. I have been a long time holder of SFL since the IPO and the company has done well for me. You need to sell shares when the company gets over valued based on their cash flows (I have always sold in the $25/share - $29.00/share range), because of the nature of their business, you will have the chance to buy them back at $0.50 on the dollar. If you have been a buyer recently in the $10.50/share range. it's probably not too bad to peel some shares off and take your profit. Both SFL and FRO are up big today as investors seem to think the worst is over on day rates and those rates will be much higher in the future. The other risk w/ SFL is that the next generation of ships will be much more energy efficient making their operating cost much lower. SFL has few if any of these ships in their lease fleet. This makes their future cash flows vulnerable from a competitive position. I would like to see them finance these next generation vessels, in particular those that Fredricksen has in mind for his new company. If he chooses not to use SFL as the financing arm, it alerts me as a shareholder that maybe I should find the exit door before the competitive environment "stings" SFL. EKS

To: thatsnotluck who wrote (47072)	3/22/2012 3:41:21 PM
From: E_K_S	Respond to of 78767

Here is a recent article about Fredriksen and his empire and where he is finding bargains. Finding Safe Harbor Christopher Helman, 03.21.12, 06:00 PM EDT Forbes Magazine dated April 09, 2012 Shipping titan John Fredriksen’s $11 billion fortune has soared while the tanker industry has been tanking. His secret offers a lesson for every industry. forbes.com -------------------------------------------------------- He is raising over $1B in cash to go shopping for new next generation supper energy efficient ships. He believes this new technology will provide him a significant operating advantage that his new company (FRO-2012) will be the leader and most profitable shipping company in the World. So I wonder who are the company's that are supplying this next generation technology. Maybe there is a value priced stock in that group? EKS