Author Topic: SSW - Seaspan  (Read 129650 times)

Uccmal

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Re: SSW - Seaspan
« Reply #190 on: May 18, 2011, 04:21:45 AM »
Myth, this is an easy stock to hold long term, for now -how's that for an oxymoron.  I keep sizing up my position slowly on the dips.  A 4% dividend yield at this time with a progressive increase coming. 

I have held this for over 2.5 years and gotten to know it - that's one of my favourite scenarios.
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VAL9000

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Re: SSW - Seaspan
« Reply #191 on: May 18, 2011, 08:51:23 AM »
Eric, I don't think you overdid it at all.  Honestly when I read your post I had a brief panic attack - both because I thought you were right on and because I was disappointed in myself for missing such a critical impact to the business model.  I initially wrote up a long response about how this isn't the first time efficient ships were introduced, and it'll take years to work through the fleet, and yadda yadda yadda..  it took me an hour or two of good thought and research before I came up with the counterexamples that I presented.

I guess this is my round about way of saying thanks for giving proper consideration to the other side of the coin.  I'm glad you're able to act as a counter balance to my enthusiasm regarding Seaspan.

Myth465

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Re: SSW - Seaspan
« Reply #192 on: May 18, 2011, 09:58:59 AM »
Myth, this is an easy stock to hold long term, for now -how's that for an oxymoron.  I keep sizing up my position slowly on the dips.  A 4% dividend yield at this time with a progressive increase coming.  

I have held this for over 2.5 years and gotten to know it - that's one of my favourite scenarios.

I agree but it just doesnt jive with my thesis. I was expecting a ramp up in dividend payouts. I bought at $9 or $10 and held for about 1.5 years. Then sold to raise capital, then bought options as a trade, now looking for an exit on the remaining portion of those. I think Wang is doing whats right, but I dont like the shipping business. It seems like a feast or famine deal. When its good its really good, and when not good its damn right brutal.

I want my feast, because I fear another famine.  Plus at my age I prefer capital gains. Without rises in the dividend we wont see many capital gains inmo. I think they are doing whats right, it just doesnt fit the original thesis.

menlo

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Re: SSW - Seaspan
« Reply #193 on: May 18, 2011, 10:14:41 AM »
World Shipping Council overview of liner ships (includes containerships, so somewhat relevant to SSW).  SSW does not appear to be a member.  Opens as a pdf.

http://www.worldshipping.org/public-statements/2011_Container_Supply_Review_Final.pdf

VAL9000

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Re: SSW - Seaspan
« Reply #194 on: May 18, 2011, 10:23:04 AM »
I agree but it just doesnt jive with my thesis. I was expecting a ramp up in dividend payouts. I bought at $9 or $10 and held for about 1.5 years. Then sold to raise capital, then bought options as a trade, now looking for an exit on the remaining portion of those. I think Wang is doing whats right, but I dont like the shipping business. It seems like a feast or famine deal. When its good its really good, and when not good its damn right brutal.

I want my feast, because I fear another famine.  Plus at my age I prefer capital gains. Without rises in the dividend we wont see many capital gains inmo. I think they are doing whats right, it just doesnt fit the original thesis.
Myth, I won't argue with your thesis or your position on cap gains vs. your age, but I do want to look at the cap gains numbers.  Assuming the 5% yield sticks and the $1.50 is right, then in 2013 we're looking at $31.50/share incl. dividends.  Which is 85% in less than two years - about 36% per year.  Maybe I'm dead wrong on the div and the gain, but I think I'm in the 80% right zone, which still puts me at 28% per annum.  Maybe that's below the expected return in this market, but I'll take what I can reasonably assess as probable.

I'll note that during feast and famine, Seaspan's operations and customers have performed exactly as expected.  Their financing got screwed, though, so they're not impervious to flaw :D

PS. This is one of the things that keeps me from investing in a company like MSFT..  85% value creation for them means that they need to create about $160bn in present value gains.  It just seems like such an improbably large number.  Maybe I need more imagination or something, but I see SSW creating $1bn more quickly than MSFT creating $160bn.

txlaw

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Re: SSW - Seaspan
« Reply #195 on: May 18, 2011, 12:04:38 PM »
Thought you guys might be interested in the following article:
http://blogs.wsj.com/law/2011/05/18/slow-steaming-or-anticompetitive-behavior-the-eu-wants-to-know/

I have no dog in the fight when it comes to SSW.  Just providing info.

Uccmal

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Re: SSW - Seaspan
« Reply #196 on: May 18, 2011, 01:12:36 PM »
Myth, Building on Val's numbers, which are probably not wildly optimistic, I have a company that I have held for a long time that has:
1) Cut its dividend during a tight financing, and overgrowth period
2) Raised its dividend back up when cash flow returned
3) Has avoided unnecessary share dilution with some skilfull deals.
4) Appears to be have honest and capable management.
5) Appears to have a long term good client base.
6) May growth at 30% in stock price cagr over 2 years while having the margin of safety of a consistent 4% dividend.

Probably the most key thing for me is the correlation between owning companies for a long time and outsize returns.  All of my biggest hits by far have come from long term holdings.  Obviously some survivorship bias but often my biggest returns have come after any notional target price has been reached.  I also have other more speculative Graham and Dodds kicking around to fill the low return void of SSW :P
GARP tending toward value

Myth465

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Re: SSW - Seaspan
« Reply #197 on: May 18, 2011, 01:37:10 PM »
I agree with you guys. I have a few singles and doubles and 2 grand slams (ATSG, and SD).

ATSG was gut wrenching but worked out exceedingly well. At my capital base I feel as though I need to stick and move. I have 3-4 long term holdings for 2 - 4 years. SSW is just in an industry I dont like, and I dont like the focus on growth. I have too many stocks tied to oil prices, global recovery, and rising dividends lol. The market was under supplied, then fairly supplied, then oversupplied due to world wide recession, then slow steamed, and now we are under supplied again.

I dont feel comfortable betting on world wide growth, China's continued rise, or a rationale containership market. Which inmo is what you have to do if you hold SSW for the long term. Shipping is just one of those industries, ERICOPOLY inmo is correct and SSW should pay its shareholders now and perhaps form another venture to buy other ships. Rising the div to a 60% payout ratio would do wonders for the shareprice today inmo.


Also empire builders are well empire builders. These guys will focus on growth until something turns the market. Then they will be on the defensive again. At least at FRO or NAT. Shareholders got massive dividends during good times. Also the customers performed well, but what happens if China slows down just from being overheated / inflation / other woes. I think they are doing the right thing, and also believe they have covered their bases in terms of the model. I also really like the efficiencies on new ships which act as a call option on rising oil prices. That combined with selling off older smaller ships will make SSW very relevant.

I will be in and out, and will probably be back for the long term after some sort of shock. But in this environment I cant buy and hold given where they want to go.

Myth465

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Re: SSW - Seaspan
« Reply #198 on: May 18, 2011, 04:49:57 PM »

VAL9000

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Re: SSW - Seaspan
« Reply #199 on: May 18, 2011, 07:46:56 PM »
Good press in the journal. Cspan lol.

I remember Seaspan got some play on Cramer once.  "I'd rather watch C-SPAN than buy Seaspan!" and then he hit some bearish button.  The hilarious part was when Seaspan went on his recommended list a few months later.