Author Topic: SSW - Seaspan  (Read 134530 times)

xtreeq

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Re: SSW - Seaspan
« Reply #410 on: January 12, 2015, 11:03:44 PM »
Seaspan reported the MOL Express, a 4,600 TEU container vessel went aground in Tateyama Harbour, Japan on January 11, 2015. The company said all preliminary reports indicate the hull is in a stable condition, and no environmental damage has occurred. There were no reported crew injuries. Seaspan and MOL, with the assistance of salvage experts, are working on refloating the vessel.

http://www.nasdaq.com/article/seaspan-mol-express-vessel-in-stable-condition--quick-facts-20150113-00008


JEast

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Re: SSW - Seaspan
« Reply #411 on: July 30, 2015, 07:17:19 AM »
As a small obligation as the originator of this thread, a couple of comments are as follows. 

SSW continues to be the gold standard in the ship leasing business.  Connected exclusively to the container ship industry (not to be confused with dry bulk), they also provide the most stable sector in the shipping industry.  The growth opportunities for SSW are still open as they continue to fulfill their promises.  Given the weakness in the ‘shipping’ industry overall, Seaspan looks to be a high quality growth opportunity for the more conservative investor.  For the long-term investor with a view of 3-4 years, opportunities for prices below $18 look attractive.


Cheers
JEast

xtreeq

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Re: SSW - Seaspan
« Reply #412 on: July 30, 2015, 09:35:36 AM »
Agreed,
Results were boring (in a good way) as usual

obtuse_investor

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Re: SSW - Seaspan
« Reply #413 on: December 07, 2015, 06:57:35 PM »
I am pondering what all the sellers today (at a 52 week low of 14.25/shr) are thinking.

  • Are they worried that SSW would not be able to retain the large dividend in 2016 and are pricing that in?
  • Are they assuming that the high leverage that SSW has is going to cause trouble as China slows?
  • Are they thinking that the [potential] FED rate hike off of zero bound is going to make these high yielding companies less attractive (much like the midstream MLPs)?
  • Or is it something else altogether that I can't imagine right now?

... I was obliged to take some shares off those sellers today. Looking forward to do that more.

Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor

Uccmal

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Re: SSW - Seaspan
« Reply #414 on: December 07, 2015, 07:57:21 PM »
I am pondering what all the sellers today (at a 52 week low of 14.25/shr) are thinking.

  • Are they worried that SSW would not be able to retain the large dividend in 2016 and are pricing that in?
  • Are they assuming that the high leverage that SSW has is going to cause trouble as China slows?
  • Are they thinking that the [potential] FED rate hike off of zero bound is going to make these high yielding companies less attractive (much like the midstream MLPs)?
  • Or is it something else altogether that I can't imagine right now?

... I was obliged to take some shares off those sellers today. Looking forward to do that more.

I cant figure this out so I gave up trying.  They have continuously added ships with long lease dates.  They are leased out to 2028 on some of the newest and biggest ships.  The stock is trading as if the slow down in the China trade makes a difference to Seaspan.  Gerry Wang indicated that maintenance costs would rise as the fleet ages but that shouldn't significantly affect the dividend IMO - we are talking ships floating on a soft surface with relatively stable temperatures that dont stop and start all day long, unlike jets, or automobiles.  These ships should be good to go for double their leases, at least. 

Last year the dividend increase was ~8%.  I would think that is sustainable for now.  What I am waiting to see is if some of the ships coming off lease are sold or re-leased at good rates.  It Could be what other investors are waiting to see.  It will make the difference between SSW being a long duration pyramid scheme, and a viable perpetual business model.  In the meantime I have made $6.40 in cash on the first shares I bought. 
GARP tending toward value

Hawks

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Re: SSW - Seaspan
« Reply #415 on: December 07, 2015, 07:59:37 PM »
Thank you Mr Market. I added further to my position.

kab60

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Re: SSW - Seaspan
« Reply #416 on: December 07, 2015, 11:43:51 PM »
I suppose people worry what happens when ships come off lease. Maersk just stacked triple-E ship(s). I like Seaspan, but is it cheap? Its dividend is attractive for income seekers but on a valuation basis it doesn't scream bargain - then again, I might value it the wrong way. I know newbuilds are coming online but TTM EBITDA of 450M versus roughly EV of 4.400M. And then there might be a bit of off balance sheet financing as well?
« Last Edit: December 08, 2015, 07:51:00 AM by kab60 »

Uccmal

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Re: SSW - Seaspan
« Reply #417 on: December 08, 2015, 04:39:51 AM »
I suppose people worry what happens when ships come off lease. Maersk just stacked triple-E ship(s). I like Seaspan, but is it cheap? It's dividend is attractive for income seekers but on a valuation basis it doesn't scream bargain - then again, I might value it the wrong way. I know newbuilds are coming online but TTM EBITDA of 450M versus roughly EV of 4.400M. And then there might be a bit of off balance sheet financing as well?

It is cheap on a book value basis, and certainly on a dividend yield basis, providing what I said above about it not being a long scale pyramid scheme.

In fact, if the business is sustainable, it is beyond insanely cheap.  I have made 64%, lets say 80%,  after compounding, on the dividend alone since I first bought shares in 2009. 

It is the China effect rubbing off on Seaspan. 
« Last Edit: December 08, 2015, 04:57:18 AM by Uccmal »
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buylowersellhigh

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Re: SSW - Seaspan
« Reply #418 on: December 08, 2015, 07:06:56 AM »
My only concern is the really the recent departure of the CFO.

JEast

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Re: SSW - Seaspan
« Reply #419 on: December 08, 2015, 07:23:17 AM »
The shipping industry on the whole could be viewed at its four (4) sub-sector levels by the types of ships in use.  These types of ships are the dry bulk ships (carries coal, corn, iron ore, etc…), oil tankers (just oil here), specialty (mainly chemicals and offshore support vessels), and containers (hauls shoes, TVs, consumer goods).  Each shipping sub-sector has its own set of specific economic dynamics, but 3 of these 4 sub-sectors are all tied to the commodity industry.  As such, the shipping industry as a sector has been hammered and has had selling pressures for most of the year so not surprising that SSW is part of the downdraft.

As owners or potential owners of SSW, we know that they mainly ship TVs, shoes, furniture (consumer goods) for businesses like Wal-Mart , Kohl's, and Target (non-commodity).  As we get back to importing deflation into the US and toss in that bunker costs will be low for 2016, the major liners finances should hold up somewhat and maybe even give a push to get ships off their balance sheets which helps SSW.

The next 6-9 months most likely will remain bumpy along with the overall market.  Plus, SSW will likely have to take a write-down on 15-20 older ships in the first half of 2016 based on the values used in the refinancing deals from several years ago.  Also after Sai Chu’s retirement, they need a new CFO so the market will have to digest these items and we will have to suffer some pain while we wait.  On the other hand, the dividend should be increased 6-9% in March/April and an announcement on a few new contracts should be reported in the next few months.

Cheers