Author Topic: SSW - Seaspan  (Read 138781 times)

meiroy

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Re: SSW - Seaspan
« Reply #400 on: October 18, 2014, 12:22:54 AM »

50 % of their clientele is two Chinese shipping companies. This looks risky because its China, but it isn't really risky.  One of the Chinese companies tried to pay SSW less per ship during the recession but Gerry held firm.   

Could you clarify how this isn't really risky? The China situation is only starting and their successful adjustment is anything but guaranteed. Slowdown is inevitable and impact on anyone who relied on their over-investment is inevitable.

I do not know anything about this company, thank you for writing about it, but just this sentence makes me take two steps back thinking: 1.  Is China's over-investment/oversupply the reason for this company's growth or survival? 2. Now that China economy has to adjust, what is the impact?


Uccmal

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Re: SSW - Seaspan
« Reply #401 on: October 18, 2014, 05:37:33 AM »

50 % of their clientele is two Chinese shipping companies. This looks risky because its China, but it isn't really risky.  One of the Chinese companies tried to pay SSW less per ship during the recession but Gerry held firm.   

Could you clarify how this isn't really risky? The China situation is only starting and their successful adjustment is anything but guaranteed. Slowdown is inevitable and impact on anyone who relied on their over-investment is inevitable.

I do not know anything about this company, thank you for writing about it, but just this sentence makes me take two steps back thinking: 1.  Is China's over-investment/oversupply the reason for this company's growth or survival? 2. Now that China economy has to adjust, what is the impact?


This precise misunderstanding is why SSW is trading down.  Unless China completely breaks all rules of contract law I dont see any problem.  And if they start doing that the world is going to hell real quick. 

Before investing read the financials!
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Hawks

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Re: SSW - Seaspan
« Reply #402 on: October 18, 2014, 06:53:49 AM »
meiroy
Listen to what uccmal is saying and his analysis over the years. And yeah, read the financials. Bought lots of SSW during last weeks turmoil.

Packer16

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Re: SSW - Seaspan
« Reply #403 on: October 18, 2014, 07:02:06 AM »
The Chinese counterparties to most of the leases are rated AA.  If you look at Seaspan's customer list you will find some of the most creditworthy shipping companies in the business.

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argonaut

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Re: SSW - Seaspan
« Reply #404 on: October 18, 2014, 12:32:41 PM »
Hi Uccmal,

Just a quick thought. Have you considered SFL? Somewhat higher div (over 10% last week) and last week traded just above $15 per share.

Cheers,

Argonaut

meiroy

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Re: SSW - Seaspan
« Reply #405 on: October 19, 2014, 09:07:22 PM »

50 % of their clientele is two Chinese shipping companies. This looks risky because its China, but it isn't really risky.  One of the Chinese companies tried to pay SSW less per ship during the recession but Gerry held firm.   

Could you clarify how this isn't really risky? The China situation is only starting and their successful adjustment is anything but guaranteed. Slowdown is inevitable and impact on anyone who relied on their over-investment is inevitable.

I do not know anything about this company, thank you for writing about it, but just this sentence makes me take two steps back thinking: 1.  Is China's over-investment/oversupply the reason for this company's growth or survival? 2. Now that China economy has to adjust, what is the impact?


This precise misunderstanding is why SSW is trading down.  Unless China completely breaks all rules of contract law I dont see any problem.  And if they start doing that the world is going to hell real quick. 

Before investing read the financials!

The fact that, as you say, "50 % of their clientele is two Chinese shipping companies. " means that for me this does not pass qualitatively.  At a minimum this would require a significant discount.

I also don't see how a change of relationship between these two clients and a company would mean that " the world is going to hell real quick. ".  China is not even a net contributor to global economy but we won't get into that.

It also beyond me how someone could give AA credit ratings to companies where their audit working papers are a state secret and the country of origin itself is not based on the rule of law.

As I said I do not know the specifics but will not spend time on it as qualitatively it does not pass. Just a personal preference and we each have our own.

Uccmal

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Re: SSW - Seaspan
« Reply #406 on: October 20, 2014, 04:20:35 AM »
Hi Uccmal,

Just a quick thought. Have you considered SFL? Somewhat higher div (over 10% last week) and last week traded just above $15 per share.

Cheers,

Argonaut

I had never heard of this company until now.  I did a huge amount of work on shippers in 2010 or so, including OSG?,  dry bulk, Diana, and others but never came across SFL.  Will have a bit more detailed look.  Probably one well run ship lease co. is enough in a portfolio.  There are always risks, of course.
GARP tending toward value

Uccmal

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Re: SSW - Seaspan
« Reply #407 on: October 20, 2014, 04:29:08 AM »

50 % of their clientele is two Chinese shipping companies. This looks risky because its China, but it isn't really risky.  One of the Chinese companies tried to pay SSW less per ship during the recession but Gerry held firm.   

Could you clarify how this isn't really risky? The China situation is only starting and their successful adjustment is anything but guaranteed. Slowdown is inevitable and impact on anyone who relied on their over-investment is inevitable.

I do not know anything about this company, thank you for writing about it, but just this sentence makes me take two steps back thinking: 1.  Is China's over-investment/oversupply the reason for this company's growth or survival? 2. Now that China economy has to adjust, what is the impact?


This precise misunderstanding is why SSW is trading down.  Unless China completely breaks all rules of contract law I dont see any problem.  And if they start doing that the world is going to hell real quick. 

Before investing read the financials!

The fact that, as you say, "50 % of their clientele is two Chinese shipping companies. " means that for me this does not pass qualitatively.  At a minimum this would require a significant discount.

I also don't see how a change of relationship between these two clients and a company would mean that " the world is going to hell real quick. ".  China is not even a net contributor to global economy but we won't get into that.

It also beyond me how someone could give AA credit ratings to companies where their audit working papers are a state secret and the country of origin itself is not based on the rule of law.

As I said I do not know the specifics but will not spend time on it as qualitatively it does not pass. Just a personal preference and we each have our own.


Fine by me. 
GARP tending toward value

crocodon

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Re: SSW - Seaspan
« Reply #408 on: January 03, 2015, 12:02:12 AM »
1. Found these thoughts on fast steaming interesting: http://www.joc.com/maritime-news/falling-bunker-price-gets-industry-talking-about-speeding-ships_20141103.html

2. Does anyone have information on how low bunker prices affect resale values for cargo vessels?

JEast

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Re: SSW - Seaspan
« Reply #409 on: January 03, 2015, 07:54:29 AM »
Bunker costs are roughly 30-40% of operational costs for liners.  So yes, lower bunker costs have the potential for liners to go back to the faster routes.  However, I am of the belief that most major liners like the slower steaming but will selectively take a ship out of a route for the right price or customer demand.

As for the value of the assets, lower bunker costs will help the much older short-haul vessels to survive a little longer before being sold into the scrape markets.  The biggest influence on asset prices are scrape rates and customer demand more so than bunker costs.