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13-May-08
From my effingbulls.com post on GNK 2 weeks ago - BEFORE they announced they were going to acquire 3 more ships this fiscal year.
- Daily avg. revenue per vessel: $35,891. Daily avg. cost to operate a vessel: $4,278. That’s almost a 800% gross profit margin.
- Daily avg. revenue per vessel up from $20,683 last year same qtr. Up almost 33%.
- Charter rates expected to go up more.
- Genco locks in these rates in staggared multi-year contracts, so rev’s are stable.
- Genco operates 28 vessels with 4 more ships being built in next 1.5 years.
- These 4 ships immediately add $260,000 (prolly more at those contract rates when signed) / day in revenue.
- These 4 ships add $23.7mm revenue per quarter ($94.9mm annually).
- This quarter they made $91.7M, so that’s an immediate 25% revenue growth.
- Upped dividend from 0.85 / qtr to $1.00 / qtr.
Factoring in the 4 ships revenue at an assumed $65,000 / day (the rate they signed last contract), I have come up with my own personal estimate on GNK share price for 2010. Note, since I wrote this, GNK has entered into an agreement to buy 3 more ships this year. This will affect my analysis, but I need to dig into the aspects of the deal before commenting)
- Est. 2010 Earnings: $480,440,000 (2007 Earnings $185,387,000)
- Est. Profit Rate (Q1 2008 was 81%): 77%
- Est. 2010 Net Income: $369,938,800 (2007 Income: $106,809,000)
- Shares Out: 28,914,350
- Est. 2010 EPS: $12.79 (2007 EPS: $3.69)
- Est. 2010 PE: 10 (Industry Avg EPS: 14.5)
- Est. 2010 Price: $128.00
** UPDATE **
As of yesterday the Baltic Indexes have SURGED. When I wrote the original analysis, it was around $110,000 per day for a Panamax ship (literally weeks ago). I was estimating at $65,000 to be conservative.
Today, Baltic rates are over $210,000 / day for the same Panamax. Almost a 100% surge in rates, due to an overwhelming demand and forecasted future demand (fueled in part to the Earthquake in China). Numbers could be revised upward from here, but we need to see how rates are shaping up when delivery is taken of vessels and what they lock their charter in at. Potential for even more upside here.
Tagged Stocks: GNK
Posted at 18:32 in Watchlist Ideas | Permalink | Comments () | Top
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