Category Archives: Uncategorized
Private Network: Bought GLOG, GNK, GoodBulk, LPG/BWLPG, General news, Portfolio update
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EURN-US: Initiation (SELL, TP 6.2)
Euronav has a large fleet of crude tankers, consisting of 32 VLCCs, 23 Suezmaxes and a 50% ownership in two FSOs on long term charters. The company enjoys a large liquidity reserve and could play to role as consolidator in the...
ALNG-NO: Getting ready to ride the cycle (BUY, TP 5.6 [6.9])
The company today announced a restructuring and recapitalization of the balance sheet by deferring charter hire payments to Teeky LNG Partners and a private equity placement of USD ~25m through a book building process. As we touched upon in our initiation in...
GLOG-US: Initiation (BUY, TP 18)
We initiate coverage of GasLog with a BUY recommendation and target price of USD 18. The company has a fleet of 27 LNG Carriers (including five newbuldings) with a contract coverage of 76% in 2017 and an average minimum back-log per contracted vessel of ~5.5 years. Although the secured cash-flow enables the company to pay dividends even at the trough (current annualized dividend yield at 8%), it also equates to less operational leverage at what we believe to be the expansionary point in the cycle from mid-'17. In addition, GasLog is exploring possibilities within the booming FSRU segment, and has an attractive source of financing trough its MLP (at least in the current environment of low interest rates). We find low risk and great valuation in GasLog and initiate coverage with a BUY recommendation and TP of USD 18.
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Tagged GasLog, GLOG, GLOP, LNG, LNG carriers, LNG tankers, shipping
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Dry Bulk Appendix
As a response to popular demand, we have compiled a couple of asset specific slides as an appendix to our Dry Bulk: Sector Update from 4 April 2017. Disclaimer: The publisher currently owns shares in EGLE-US...
FLNG-NO: Initiation (BUY, TP 17)
We initiate coverage of Flex LNG with a BUY recommendation and target price of NOK 17.
The company has no vessels on the water in the current trough, but four MEGI LNGC newbuildings scheduled for delivery in 2018. Given our view that the trough is finally coming to an end in 2q17 and that the expansionary phase of the cycle is imminent, we find the setup of Flex extremely attractive. Adding the strong sponsor in Mr Fredriksen, we see additional upside from future accretive deals and positive bias from investment banker analysts.
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Tagged Flex LNG, FLNG, FLNGF, LNG, LNG carriers, LNG tankers, shipping
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SHIP-US: Initiation (BUY, TP 1.25)
We initiate coverage of Seanergy Maritime with a BUY recommendation and target price of USD 1.25.
The company has made some very attractive acquisitions at the bottom of the cycle, one example being the two 2010-built Korean Capes which have appreciated ~60% since the deal was announced six months ago.
We see recent equity issuances as accretive given the appreciation of asset prices. However, we believe a discount on the company vs peers is just given several factors; including the At-The-Market (ATM) program, recent fee structure, the class A Warrants and share illiquidity.
Valuation: Our target price of USD 1.25/sh is based on a NAV of USD 0.94/sh, but added value from the optionality of a further 10% increase in asset values which would equate to a NAV of 1.67/sh, and applying a 25% discount. The implied asset value elasticity of NAV is 79% in our calculations, which is attractive given our view of rising asset prices, but equally sensitive on the downside... We recommend the less risk averse investor to BUY the share.
Dry Bulk: Sector Update
The first quarter of the year definitely surprised on the upside in terms of seasonally high earnings and rising asset prices. The latter is natural when considering that most listed players have a strong currency in its share price after the recent surge, and we have seen several very accretive shares-for-ships type deals. Although we have a positive view on the dry bulk sector, we are lukewarm to the shares as too much of the cyclical upturn is already priced in. Earnings are lagging with a median EV/EBITDA of 28x in 2017E and 17x in 2018E on our estimates. Thus, we find the current valuation too steep, although with a few company-specific deviations. Any potential fall in share prices could represent an excellent opportunity to buy.
BORR-NS: Initiation (BUY, TP 54)
We initiate coverage of Borr Drilling with a BUY recommendation and target price of NOK 54 The company is still in its cocoon, and we believe it is about to become a butterfly at an opportune time in the cycle. Recent chatter links...
DSX-US: Initiation (SELL, TP 3.1)
We initiate coverage of Diana Shipping with a SELL recommendation and target price of USD 3.1
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GNK-US: Initiation (Neutral, TP 10.9)
We initiate coverage of Genco Shipping with a Neutral recommendation and target price of USD 10.9
We find the dry cargo space very interesting and believe that the trough was 1Q16. The company is recently restructured, in a sound liquidity position and well placed to take advantage of the ongoing cyclical upturn. We find the share very reasonably priced comparative to steeper valued peers such as GOGL or SBLK, and could be contemplating a rating upgrade if the share price continues to slide.
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EGLE-US: Initiation (Neutral, TP 5.5)
We initiate coverage of Eagle Bulk with a Neutral recommendation and target price of USD 5.5
We find the dry cargo space very interesting and believe that the trough was 1Q16. The share is attractively priced comparative to peers, but we deem its fleet to have strong industrial qualities which is less opportune in the current point of the cycle.
Something that could spark the stagnant and peer-trailing share price into life is further corporate actions (accretive equity issuances & vessel acquisitions) in addition to increased focus from positive investment banker analysts. We do believe the share will outperform peers in the short to medium term, and suggest the hedged dry bulk investor to go long EGLE and short steeper valued peers such as GOGL or SBLK.
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SALT-US: Initiation (Neutral, TP 7.1)
We initiate coverage of Scorpio Bulkers with a Neutral recommendation and target price of USD 7.1 We find the dry cargo space very interesting and believe that the trough was 1Q16. The share is attractively priced comparative to peers, but...
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SBULK-NO: Initiation (Neutral, TP 41)
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SBLK-US: Initiation (SELL, TP 5.2)
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GOGL-US: Initiation (SELL, TP 4.0)
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