TheCatalystCalendar
Sep 2, 11:05 PM
$GNK ,
$SB ,
$SBLK ,
$DHT,
$HSHP
Drybulk, oil tankers, lng Shippers (Greek shippers mainly but all of them), go through a 20-30 year cycle, where they take on massive loans to buy ships, use the ships, and as the ships get older it costs more and more to run them. With the dry docking for repairs, the interest on the loans, it’s an expensive endeavor.
Then after 20 years or so they try to sell off their old fleet. This is when things get juicy. They sell off the old ships and use that cash to replace them with newer, cheaper vessels. They also pay down their debt, to the magical point where the Loan to Value ratio is under 20%. Suddenly they are making bank on daily rates and have nowhere to put that money.
Thats when their stock prices start to rise substantially, consistently, sometimes doubling or more year to year. They start to buy back shares. And then they start to pay higher and higher dividends. The five I tagged above are all into the good part of the cycle. I’m in all 5
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