Author Topic: GRIN - Grindrod Shipping  (Read 2122 times)

mjohn707

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Re: GRIN - Grindrod Shipping
« Reply #10 on: September 21, 2018, 07:16:39 AM »
Interesting story, do you have more details? What is NAV, is it compelling? How do peers trade? Why was it spun off.

Seems like new investment ideas have gone from full blown ideas with a thesis and facts to "here's some random ticker with eight sentences, give me your notes."

Not trying to be rude.  I'm always in the market for new ideas, but I have no idea why I should look at this.

I think that a random ticker without facts or a thesis perfectly describes my investing style actually
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whistlerbumps

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Re: GRIN - Grindrod Shipping
« Reply #11 on: September 21, 2018, 08:07:24 AM »
Interesting story, do you have more details? What is NAV, is it compelling? How do peers trade? Why was it spun off.

Seems like new investment ideas have gone from full blown ideas with a thesis and facts to "here's some random ticker with eight sentences, give me your notes."

Not trying to be rude.  I'm always in the market for new ideas, but I have no idea why I should look at this.

hahaha... fair enough.... Stock was spun off because the parent company didn't believe that they were getting credit for their shipping assets from South African investors.  Thus, they wanted to split out the shipping assets and move them to an exchange that had more knowledgable shipping analysts... 

As GND Finance Director, Andrew Waller noted, the shipping business had a balance sheet value of R20 per GND share but GND was trading at R11 which suggested that something was wrong.  He also noted that "We could easily have sold it (shipping) to someone, but we don't think selling shipping for $320m (listing valuation of $16.82 per GRIN share) is a very clever idea. We would rather our shareholders hold that share."

So management set the listing value at $16.82 per share and thought that there would be greater value for shareholders holding the share instead of just selling the company and distributing the proceeds.  Based on my own analysis with Clarkson's data and some changes in the balance sheet, I think current NAV is >$14.  Most shipping companies trade near NAV unless there is some issue (corporate governance, excessive leverage etc).  GRIN has a solid balance sheet and no corp gov concerns. 

Furthermore, I believe that dry bulk market is already tightening and the MR tanker market should tighten next year so NAV could increase as ship values increase.  The company believes this as well and noted in the pre-listing statement "that dry bulk (upturn) has already started to happen and that tankers may move in 2019."  As rates increase, GRIN should also generate significant EBITDA.

Hope that helps.  Happy to answer specific questions.





globalfinancepartners

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Re: GRIN - Grindrod Shipping
« Reply #12 on: September 25, 2018, 08:13:58 AM »
What just happened here with GRIN?

whistlerbumps

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Re: GRIN - Grindrod Shipping
« Reply #13 on: September 25, 2018, 08:19:52 AM »
Not sure... its gone crazy before though... check out the trading on 8/20

rukawa

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Re: GRIN - Grindrod Shipping
« Reply #14 on: September 27, 2018, 08:41:41 PM »
The easiest way is to pay for data from Clarkson's....You can also get the Clarkson's data from a variety of sell side notes... the hardest way is to track ship purchase and sales....

How did you get the Clarkson's data?

whistlerbumps

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Re: GRIN - Grindrod Shipping
« Reply #15 on: September 28, 2018, 04:43:44 AM »
from Clarksons... but as I mentioned, you can also get it out of industry notes from the sell side...

Foreign Tuffett

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Re: GRIN - Grindrod Shipping
« Reply #16 on: September 28, 2018, 08:17:21 AM »
After 15 minutes of work on this name:

Trading @ ~50% of TBV. That's good.

1H 2018 results look pretty brutal. Only $2.4 million in gross profit? 1H 2017 results were better, but their gross profit still fell significantly short of covering G&A.

I know they have another segment, but dry bulk shipping has historically been one of the (the?) worst industries to invest in. I think this is because the barriers to entry are very low.

I'm not seeing a compelling reason to buy this. What am I missing?

whistlerbumps

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Re: GRIN - Grindrod Shipping
« Reply #17 on: September 28, 2018, 08:25:58 AM »
This is certainly not a compounder or a great business.... whether dry bulk is a good investment depends on where we are in the cycle... with low orderbooks and IMO 2020 coming, I am personally bullish on the cycle but that's for each to decide on their own...

whistlerbumps

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Re: GRIN - Grindrod Shipping
« Reply #18 on: October 08, 2018, 02:08:34 PM »
From seeking alpha post on GRIN today:

Gross fleet value = $458.0 million

less: total net debt = $200.0 million

equal: Net asset value = $258.0 million

divide by: total shares = 19.06 million

equal: NAV per share = $13.53 per share

Currently, the stock price of company is $7.20 or a 47% discount to this per share net asset value. Theoretically, if the company was to sell all of its ships, and repay all its liabilities, the owners would receive about $13.50 per share or a 80% return on the current share price.

I have disregarded non-cash and non-vessel assets, and non-debt liabilities from this analysis. However, the net asset value would be higher if I had included them. As a test of reasonableness, the reported book equity of $302.4 million (or $15.87 per share) exceeds my NAV calculation.

https://seekingalpha.com/article/4210446-grindrod-shipping-deep-value-ahead-imo-2020

mjohn707

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Re: GRIN - Grindrod Shipping
« Reply #19 on: October 15, 2018, 12:10:10 PM »
From seeking alpha post on GRIN today:

Gross fleet value = $458.0 million

less: total net debt = $200.0 million

equal: Net asset value = $258.0 million

divide by: total shares = 19.06 million

equal: NAV per share = $13.53 per share

Currently, the stock price of company is $7.20 or a 47% discount to this per share net asset value. Theoretically, if the company was to sell all of its ships, and repay all its liabilities, the owners would receive about $13.50 per share or a 80% return on the current share price.

I have disregarded non-cash and non-vessel assets, and non-debt liabilities from this analysis. However, the net asset value would be higher if I had included them. As a test of reasonableness, the reported book equity of $302.4 million (or $15.87 per share) exceeds my NAV calculation.

https://seekingalpha.com/article/4210446-grindrod-shipping-deep-value-ahead-imo-2020

It was a really long 20-F, but I think you're right that it's decent at this price.  I wasn't able to make heads or tails of the information from Hellenic Shipping News as far as the valuation of the boats and all go, but I think as a whole it all makes sense.  Has some risks and all, but what doesn't.  Appreciate the idea
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