Author Topic: SSW - Seaspan  (Read 134432 times)

Uccmal

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Re: Seaspan Begins The Year With Promise
« Reply #60 on: October 26, 2010, 09:15:39 AM »
That financing deal and the apparent need not to dilute shareholders anymore has put a real fire under the stock.  I have held this for about two years and watched it do nothing until last week.  I wonder if a dividend increase will be coming?
GARP tending toward value


Myth465

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Re: Seaspan Begins The Year With Promise
« Reply #61 on: October 26, 2010, 09:37:19 AM »
I am a happy camper. This is one of my largest holdings. I think we will see consistent dividend increases as long as new ships come online. I am up about 30% or so and have been adding along the way. $2 in divs will look great versus my basis, and given where REITs trade it could do wonders for the share price.

ERICOPOLY

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Re: Seaspan Begins The Year With Promise
« Reply #62 on: October 26, 2010, 09:55:20 AM »
This one is fueling my returns this year.  I had a 50% portfolio weighting with cost basis of $11 when it was trading at $10 this summer.

I was just checking the newbuild order book:
http://www.seaspancorp.com/fleet-newbuild-orderbook.php

It looks like by this time next year they'll have most of the ships in place.  Should be good for another 50%-100% return from here.

So I haven't sold anything.

UhuruPeak

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Re: Seaspan Begins The Year With Promise
« Reply #63 on: October 26, 2010, 11:15:15 AM »
This one is fueling my returns this year.  I had a 50% portfolio weighting with cost basis of $11 when it was trading at $10 this summer.

Eric, it always amazes how willing you are to still bet big on some companies even now that you don't need to grow the portfolio anymore.  Btw, are you not in BAM anymore? Every time I see the quotes I want to kick myself for not having followed you last year when you mentioned it!

PS: also long SSW, large-ish line, clearly helping my performance this year as well

ERICOPOLY

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Re: Seaspan Begins The Year With Promise
« Reply #64 on: October 26, 2010, 01:57:00 PM »
even now that you don't need to grow the portfolio anymore.  

Need vs Want.  It's a struggle to keep them in check.

My grandmother has a very expensive property near Sydney with a view to the west overlooking Pittwater that's been in the family since 1949 (my father and grandfather built it themselves) -- it's a 5 minute walk down to Whale Beach.  This is where I've been spending a month the past few North American winters.  She is 93 and the place is expensive -- I want to keep it in the family when the time comes, and I'm trying to beat the clock.  I've been taking vacations there ever since I was 6 months old -- I have a lot of memories there.  I don't really need the property, but I want it.  It would cost 1/3 of my present net worth -- so I'm trying to grow it.

Not in BAM anymore, sold it along the way to buy ICO (not in that anymore either).  I would have done well if I'd kept it in BAM, but I did slightly better with ICO because it worked out sooner and I made further gains with the money after I sold ICO.


« Last Edit: October 26, 2010, 02:17:29 PM by ERICOPOLY »

Myth465

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Re: Seaspan Begins The Year With Promise
« Reply #65 on: October 26, 2010, 05:13:55 PM »
Eric has the best ideas on concentration and risk that I have come across.

UhuruPeak

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Re: Seaspan Begins The Year With Promise
« Reply #66 on: October 26, 2010, 07:39:17 PM »
Eric has the best ideas on concentration and risk that I have come across.

No argument from me there!

finetrader

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Re: Seaspan Begins The Year With Promise
« Reply #67 on: October 27, 2010, 06:39:28 AM »
You guys are becoming more and more convincing!
I'm quite late to this one but have join the party this morning by opening a position.  (not the first to do it, but hopefully not the last!)

For me, distributable cash is equivalent to cash flow from operations. (would take out a few elements like share-based compensation though)
If I get it properly, the thesis on SSW is that they should have about 300M$ distributable cash in about 2 years.
Would be nice to have a sense of the free cash flow generation then.
Way to do it would be to take distributable cash minus maintenance capital expense (ex:new vessel replacing old one)
A quick glance tells me that FCF is quite high as the majority off the new vessels is adding to the float as opposed to replacing an old on)
Any guidance regarding FCF?
« Last Edit: October 27, 2010, 09:27:18 AM by finetrader »
Live to invest, invest to live

Myth465

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Re: Seaspan Begins The Year With Promise
« Reply #68 on: October 27, 2010, 08:53:00 AM »
They have a presentation online that they update quite often

http://files.shareholder.com/downloads/SSW/1049196086x0x412574/f8dd52cc-e6ee-4204-b8aa-fb63efca1cd3/SSW_Q3_10_Presentation_-_FINAL.pdf

http://files.shareholder.com/downloads/SSW/1049196086x0x409788/10ff9790-5417-4c1b-b036-66088c4546ec/LATEST_Seaspan_Company_Presentation_September_2010_FINAL.PDF

You are right though, its not broken out or clarified. I assume it includes maintenance, interest, and all cash expenses (similar to a reit, and I believe Maintenance Capex would be Dry Docking). As far as replacement, these assets last 30 years. You may want to call Investor Relations, thats a good question.
« Last Edit: October 27, 2010, 09:10:07 AM by Myth465 »

ERICOPOLY

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Re: Seaspan Begins The Year With Promise
« Reply #69 on: October 27, 2010, 10:13:19 AM »
I'm wondering how much money could be realized by scrapping their fleet.

Here is an article from late 2008
http://blogs.telegraph.co.uk/finance/theasiafile/5990607/Container_ships_are_a_load_of_old_scrap/

Quoting:
A leading executive from one of China’s biggest shipbuilding and operating firms told me that some analysts fear that even brand new $100m container ships may be worth more as scrap metal than ocean-going transports.

I'm not really sure how much of a discount the ships sold for, but I'm guessing it wasn't greater than 70%.  So let's say it's like 30% of the market price of a new ship -- were brand new $100m ships going for $30m in late 2008?  Or were they going for more, like let's say 40%?  Somewhere in there perhaps is the truth... and if the quote is accurate then scrap value is somwhere between 30% or 40% of the cost of a new ship.  Or perhaps this is a completely wrong assumption... can somebody help me out here?

Here is what I'm getting at...  steel prices will likely triple (or more) in nominal terms over 30 years.  They might be depreciating these ships on paper, but I think in reality there will be no depreciation.

Their fleet on average is only 5 years old.  Therefore, I'm sort of banking on the cash flow to be entirely distributable to shareholders and let the depreciating dollar (rising steel prices) pay off the cost of these ships (cancel all of the debt upon scrapping in addition to return of invested capital).

Who knows, perhaps scrap value will be substantially higher than the initial cost of the ship?


« Last Edit: October 27, 2010, 10:15:16 AM by ERICOPOLY »