Disclosure: I bought a small position of this stock at $1.30 on 10/1/2009. As you can see, I am down 21% since my purchase. At current, it makes up less than 2% of my portfolio, so I am not going to sweat it.
However, as I see this one drift even lower, it’s becoming even more enticing. Today, the stock is at $1.02 with a market cap of around $92 M. As most of you know, market cap is simply the “value” of a company (by wallstreet standards) determined by # of shares times the share price. If you could buy up all the shares on the open market, this is the price taht you would pay for a hostile takeover of the company…
That being said, let’s see what they have on the books:
Cash on hand = 23M
Property(ships, plants, buildings, etc) = 587M
But, you have to take into account their liabilities. Total “current” liabilities plus long term debt is around 378M.
So, if this company went into bankruptcy right now, and all assets were sold off so that creditors could be paid in full, what is left over?
587M + 23M = 610M in cash and assets
MINUS 378M liabilities
EQUALS 232M left over…
So, if I were to pay 92M for this company (market cap) and liquidated everything to pay off the bills, I would make a handy 140M dollars. Ballpark math says that I would make about 150% profit…
Anyway, it’s 52 week low (and all time low for that matter) was 80 cents per share around the march market lows. This was the price in which everyone thought taht the world would collapse and that the shipping industry would permanently fold. Common sense tells you that the truth always lies somewhere in the middle…
I should also add that it’s alltime high was just south of $30 per share in Oct 2007.
I took a peak at their website and it seems that they are doing a lot of refreshing of older fleet and replacing with newer, larger ships. I don’t know SQUAT about the shipping industry, but I would assume that if a company had a very bleak outlook for the future that they would be scaling back and trying to