Author Topic: SSW - Seaspan  (Read 135644 times)

VAL9000

  • Sr. Member
  • ****
  • Posts: 416
Re: SSW - Seaspan
« Reply #280 on: November 01, 2011, 07:58:39 AM »
Agreed Val9000.  My position size is about 10%.  Would bump it to 15 if the price got down to 12 or so.  Not expecting that but you never know.  Last years div. Increase was 50%.  Expect something along similar lines in the next q or two.  As always, wont hold my breath if it doesn't happen on my schedule.

I'm listening to the earnings call right now.  Sai (CFO) said that they will probably examine this on an annual basis going forward.  My interpretation is that we'll probably see a dividend bump in six months.

We should see another deal in place by the end of the year.  I recall something about the Carlyle Group JV requiring Seaspan to pick up a minimum 50% of all vessels ordered through their JV, evaluated annually.  The first order they took on 3 of 7 vessels, so they need to order at least 1 more by end of year.


JEast

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 737
Re: SSW - Seaspan
« Reply #281 on: November 02, 2011, 07:47:36 PM »
Much like Fairfax of day past, every time a company’s management is proactive and does something to improve the balance sheet for the longer term, either the market ignores it or punishes the equity.  Another case in point as Seaspan has been quite nimble over the last 3 years coming up innovative ways with and managing the balance sheet.

With these recent moves to remove their (4) oldest ships from the fleet before the charters expire is quite beneficial.  One, it removes the uncertainty in a tough re-charter market, and two, it frees up some capital for new builds that are surely coming.  Of course, the downside is reduced revenue upfront which I assume the market is looking at currently.

Though well known by now, this call was interesting in the fact all, or most, of the European shipping banks have or will be pulling in their capital.  This bodes will for the ones that do have capital to buy bigger and more fuel-efficient ships. 

This is not a 10-bagger, but seems like a safe income producing equity for RRSP or a US IRA.  Of note for taxable accounts, roughly 80% of the income received is treated as return of capital for US investors.


Cheers
JEast

Disclosure: Full position again

bathtime

  • Lifetime Member
  • Full Member
  • *****
  • Posts: 189
Re: SSW - Seaspan
« Reply #282 on: November 30, 2011, 02:29:26 PM »
I haven't owned SSW before, but I know it's a favorite here. Is it cheap at these prices or does the micro macro uncertainty make it risky to own with its exposure to shipping? Thanks!
« Last Edit: November 30, 2011, 08:52:07 PM by bathtime »

Uccmal

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3692
Re: SSW - Seaspan
« Reply #283 on: November 30, 2011, 05:39:16 PM »
Bathtime, its cheap.  Cheap as it has ever been relative to safety.  It seems To trade off of shipping rates but that is not relevant to its earnings.  It operates as a REIT, more or less- one of a kind.

Suggest you review the posts and the link to posts from the past message board, and read the financials, before investing.
GARP tending toward value

Uccmal

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3692
Re: SSW - Seaspan
« Reply #284 on: December 13, 2011, 06:36:21 AM »
Well it was cheap.  Still cheap according to the SSW managers and board:

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632786


GARP tending toward value

Santayana

  • Lifetime Member
  • Full Member
  • *****
  • Posts: 195
Re: SSW - Seaspan
« Reply #285 on: December 13, 2011, 06:50:10 AM »
Can anyone explain how tender offers work?   If they are buying at $15, why would the price spike to $14 this morning, and then fall back into the 12s?

VAL9000

  • Sr. Member
  • ****
  • Posts: 416
Re: SSW - Seaspan
« Reply #286 on: December 13, 2011, 08:22:55 AM »
Well it was cheap.  Still cheap according to the SSW managers and board:

http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632786

They also announced this, which is interesting:
http://ir.seaspancorp.com/releasedetail.cfm?ReleaseID=632783

Quote
Seaspan Corporation (NYSE: SSW) today announced that it has entered into a binding memorandum of understanding to acquire Seaspan Management Services Limited (the "Manager") in a stock-based transaction valued at $54 million

This could open the door to non-financing revenue streams for SSW.  Thinking of the Carlyle agreement, SSW will finance, operate, and charter roughly half of the vessels taken on by the Carlyle vehicle.  The other half, while financed and chartered externally, will still require operations.  The obvious candidate for running these ops is SSW, but they will need to change their model to support this.  They will require a method of selling and servicing operations and this purchase gives them that method.

Gerry Wang, CEO, is leaving Seaspan in about a year.  Gerry is credited with putting together the deals that fueled Seaspan's growth.  The growth-oriented CEO is out and the operations-oriented business is in.  Thinking out loud...  this could be a transition back to the high dividend/MLPish structure from a few years ago.



Uccmal

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3692
Re: SSW - Seaspan
« Reply #287 on: December 13, 2011, 08:50:31 AM »
Can anyone explain how tender offers work?   If they are buying at $15, why would the price spike to $14 this morning, and then fall back into the 12s?

No idea... But it looks like an arbitrage opportunity to me.  If I can scare up some cash to buy some shares to tender that would be nice.  They are reducing the share count by around 15%.  So the dividend will be less in total, spread among fewer shares.

As per your comments Val, it looks as though the big growth phase is over, which should leave alot of cash for dividends.
GARP tending toward value

gaf63

  • Lifetime Member
  • Full Member
  • *****
  • Posts: 209
Re: SSW - Seaspan
« Reply #288 on: December 13, 2011, 09:34:02 AM »
Just yesterday the FT had  a full page on the woes of the shipping industry, values of ships declining and banks calling in loans, foreclosures of more cos., etc., so this was great news this morning
Will bring the fully diluted share count to the mid 80 millions after purchase of the mng. co. , and halve their cash on hand , which tells me they are not worried about the financing of the last 3 ships in 2012(hopefully a correct assumption).

Trading in SSW this morning is perplexing after this news tho

alertmeipp

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2532
Re: SSW - Seaspan
« Reply #289 on: December 13, 2011, 09:48:56 AM »
lousy way to spend cash IMO.