Author Topic: SSW - Seaspan  (Read 134431 times)

Uccmal

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Re: SSW - Seaspan
« Reply #100 on: January 06, 2011, 12:59:34 PM »
Never mind, I found it:
Wells Fargo (WFC) is upgrading Seaspan Corporation (NYSE: SSW) to Outperform.

We are upgrading SSW to Outperform as we believe SSW remains best of breed' within the containership sector and we expect fundamentals across the containerized freight complex to remain firm in 2011, Wells Fargo writes.

After pulling back 11% since late October (versus the S&P, up 7%), SSW is now yielding 3.8%, which we view as solid compensation for owning through 2011 into 2012, at which point we expect material dividend upside potential. We believe SSW's dividend could more than double in 2012 (from $0.50/share), as it fulfills its orderbook commitments and starts returning value to shareholders. Our valuation range goes to $16-17 from $15-16.

Seaspan Corporation closed Tuesday at $13.02.
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ERICOPOLY

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Re: SSW - Seaspan
« Reply #101 on: January 06, 2011, 01:16:24 PM »
As this post is now in the idea section, and I was the originator - I suppose that the full disclosure be presented.  As such, attached is the original white paper.  Though a little dated at this juncture, I am of the belief that much of the thesis is still intact even at current prices.

Feedback and critic is always welcomed from fellow board members.


Cheers
JEast

I thank you very much for the gift horse, and I hate to look it in the mouth, but I didn't understand the reasoning behind the counter-party risk.  Somebody could always tear up the lease after the ship has been unloaded, or can tear up the lease on the new-builds that are not yet delivered.   Anyhow, an academic point that isn't terribly important the way things have worked out (so far).  Or maybe I didn't understand the maritime laws governing non-payment -- is it on a per-ship basis only (allowing them to break lease after ship is unloaded) or can you seize any cargo from any of the ships (making it difficult to coordinate their ships all being unloaded at the time of lease being broken)?

Incidentally, my grandfather's grandfather (my great-great-grandfather I think) had all of his ships (about 13 I believe) sunk in the Crimean War.  Family legend has it that he was (in his late 20s or early 30s I think) on his way to being a shipping tycoon.  I think I have better luck but we'll see.
« Last Edit: January 06, 2011, 01:18:27 PM by ERICOPOLY »

Uccmal

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Re: SSW - Seaspan
« Reply #102 on: January 06, 2011, 02:46:12 PM »
James, I was just going back in my records.  I started my position in December 2008.  I wish we had the old board.  I am pretty sure you posted this on the old board as an idea way ahead of your white paper.  I know I had looked at it due to Irwin Michael holding it for a long period of time before then. 

Anyway, its good to look back at old assumptions.  The projected huge share dilution was minimal.  The dividend was dramatically reduced but I think we knew that was coming.  We didn't know during the credit crisis what would happen but they appear to have weathered it extremely well.  I wont be selling this one before 25 US is reached, if ever.  The dividend is going to go up as they get the remaining ships on lease.
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ericd1

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Re: SSW - Seaspan
« Reply #103 on: January 06, 2011, 03:26:35 PM »
James,

Great effort on your part...Thanks for sharing your in depth analysis!

I hope SSW goes thru the roof...

Eric

lessthaniv

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Re: SSW - Seaspan
« Reply #104 on: January 06, 2011, 04:50:23 PM »
James, I was just going back in my records.  I started my position in December 2008.  I wish we had the old board.  I am pretty sure you posted this on the old board as an idea way ahead of your white paper.  I know I had looked at it due to Irwin Michael holding it for a long period of time before then. 

Anyway, its good to look back at old assumptions.  The projected huge share dilution was minimal.  The dividend was dramatically reduced but I think we knew that was coming.  We didn't know during the credit crisis what would happen but they appear to have weathered it extremely well.  I wont be selling this one before 25 US is reached, if ever.  The dividend is going to go up as they get the remaining ships on lease.

Hey Al,
You can go back and have a look. JEast was 653211 back then (Correct?)... Anyway, you can google your boardname as well as the company and get the old posts.

Take a look at this link for our discussions around SSW in the "fall" of 2008, for example...

http://brk.visualhash.com/search/index.cgi?query_string=SSW&query_type=any

<IV

gaf63

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Re: SSW - Seaspan
« Reply #105 on: January 06, 2011, 06:37:03 PM »
Uccmal, left the house just after I posted, and you found more info than I had anyway,
As you say Who Knows!! what will happen to market and stock , and I dont want to be out of SSW when the 13000 teu ships come in, and they start raising the div to old levels
As to dilution,  unless they sell more stock to finance additional ships, final share count looks to be in low 90 millions, way below earlier projections

Uccmal

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Re: SSW - Seaspan
« Reply #106 on: January 07, 2011, 03:56:39 AM »
Well <IV... good to know all our comments, the good, the bad, and the ugly are immortalized..... :-\

Thanks, At least on this one we seem remarkably consistent.  My original buy prices were in the range from 5 to 9.  Since then I have churned it a little and the ACB is now just below $12.00.  The dividend has paid the interest.  What more could one ask for?
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Myth465

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Re: SSW - Seaspan
« Reply #107 on: January 10, 2011, 05:55:17 AM »
Thanks again JEast for the white paper. I really like your call option strategy for minimizing risks. I hope to use it in the future, just have to work to keep the positions properly sized. I tend to go a bit overboard.

SmallCap

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Re: SSW - Seaspan
« Reply #108 on: January 10, 2011, 08:36:23 AM »
Is any significant portion of Seaspans debts on a variable rate or subject to rate increases?

I was wondering if a rising interest rate environment would be a problem because of the long term contracts that they have in place?
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gaf63

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Re: SSW - Seaspan
« Reply #109 on: January 10, 2011, 10:56:59 AM »
Smallcap, off the top of my head from past reading,  they do have variable rate loans tied to Libor, and they have purchased interest rate
swaps to maintain their interest rate around 6%.  The interest cost does vary with the movement of Libor but is but is held within a range by the swaps.