Marketplace Roundtable

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Ted Young, CFO of Dorian LPG (LPG), joined J Mintzmyer's Value Investor's Edge Live on June 11, 2021, to discuss the LPG shipping markets and specific company prospects and capital allocation potentials. This interview and discussion is relevant for anyone with LPG sector investments, including Avance Gas (OTCPK:AVACF), BW LPG (OTCPK:BWLLF), Navigator Holdings (NVGS), and Stealth Gas (GASS).
Topics Covered

(1:45) Overview of the current and mid-term LPG markets.


(7:00) Any concern about the increasing VLGC orderbook?


(9:45) Discussion about impending environmental regulations.


(11:15) Interest in LPG dual-fuel retrofits? Economics?


(15:30) Are rising steel prices impacting newbuild costs?


(19:30) Will US LPG production, inventory, and export levels improve?


(22:30) Update on scrubber program economics.


(24:15) Are you interested in divesting the oldest 3 vessels?


(26:45) Views on target leverage and minimum cash balance?


(30:15) Appetite for more repurchases? Tender offer?


(31:30) Any concern about share liquidity?


(34:45) Potential for a new repurchase authorization?


(35:45) Any additional impact from EEXI or other initiatives?


(40:30) Any impact from the removal of Iran sanctions?


(42:30) Impact from more OPEC oil and NGL exports?


(45:00) Potential for a dividend? Structure? Special vs. regular?


(49:15) Why choose Dorian over other VLGC peers?


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John Wobbensmith, CEO of Genco Shipping (GNK), a dry bulk shipping company, joined J Mintzmyer's Value Investor's Edge Live on 25 June 2021 to discuss the strong market outlook and company specific plans for capital allocation and shareholder returns.
GNK is benefiting from surging rates and is expected to report a strong Q2 earnings report followed by an even stronger showing in Q3. Although market conditions can change and dry bulk is notoriously volatile, the supply side is the most bullish we have seen in 20-plus years and the signals from demand are also encouraging, particularly in the midsize and smaller segments, which are reviewed in detail in this update.
Perhaps of most interest to shareholders is Genco's plan to begin massive dividend payouts once target leverage is achieved. GNK's officially stated plan is to begin these large payouts after Q4-2021 results (i.e. in early-2022). However, market conditions have been very strong, so there's a potential for GNK to start to move even faster. With current market rates and GNK's stated dividend policy, we could theoretically see yields of 30% or higher against current share prices.
This interview contains relevant insights for investors in all other dry bulk companies, including 2020 Bulkers (Oslo: 2020), Diana Shipping (DSX), Eagle Bulk (EGLE), Eurodry (EDRY), Golden Ocean (GOGL), Grindrod Shipping (GRIN), Navios Partners (NMM), Pangaea Logistics (PANL), Safe Bulkers (SB), Seanergy Maritime (SHIP), and Star Bulk Carriers (SBLK).
Topics Covered


(2:00) Dry bulk market overview


(8:00) Differences between midsize and Capesize markets?


(12:30) Any clear impact from upcoming environmental regulations?


(15:45) Views on ammonia or LNG-dual fuel designs?


(17:15) Any interest in newbuild assets or resale tonnage?


(19:15) Any other growth potential?


(22:30) Potential to raise the dividend sooner due to strong markets?


(25:15) Dividend structure? Potential to pay even in weak markets?


(27:45) Views on low leverage? Optionality to increase it?


(30:15) Any desire to add time-charter coverage in this market?


(32:00) Review of scrubber program and economics.


(34:30) Why choose Genco Shipping (GNK) as the favored dry bulk play?


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The CEO and CCO of Global Ship Lease (GSL), Ian Webber and Tom Lister, joined J Mintzmyer's Value Investor's Edge Live on 11 June, 2021, to discuss the containership transport markets and forward opportunities in the markets. We also covered GSL's major acquisition of 12 containerships, which took place in early June. GSL guided for at least $1.09 in annualized EPS contribution from this latest purchase. However, with containership rates continuing to surge, I suspect GSL guided too low on the first deal and I would anticipate a minimum of $1.50 in annualized earnings contribution from those ships once they are fully delivered by the end of Q3 2021.
This interview and discussion of the underlying containership markets is relevant for anyone with interest in GSL or in related containership shipping companies, including Atlas Corp (ATCO), Capital Partners (CPLP), Costamare (CMRE), Danaos Corp (DAC), Euroseas (ESEA), Matson (MATX), MPC Containers (OTCPK:MPZZF), Navios Partners (NMM), SFL Corp (SFL), and Zim Integrated Shipping (ZIM).
Surging Containership RatesContainership leasing rates have been on a surge over the past year and we have seen subsequent all-time record highs set for each of the past six weeks. The latest Harpex Index is shown below, which reflects the benchmark rates for one-year charters:

Source: Harper Petersen, Harpex Index, 5-Year Chart
Massive Earnings Growth, Stock Stuck in Neutral?Subsequent to this interview (which was conducted on 11 June), Global Ship Lease announced yet another vessel acquisition deal on 16 June, which added four more vessels to their fleet. GSL anticipates the four latest ships will add an additional $0.88 in annual EPS, which is in addition to the $1.09 they guided from the first major acquisition in early June (but I expect closer to $1.50 contribution). Altogether, these latest two deals in June alone should add up to $2.40/sh in annualized earnings potential on top of GSL's organic fleet contribution levels.
However, despite this fleet and earnings growth, GSL stock has been stuck in neutral over the past six months, up just 15% since January and down more than 20% from peaks in mid-June. This may present a phenomenal opportunity for investors who are interested in this sector, but either way, I hope the interview will help add additional color about this firm.
 Source: Google Finance, GSL 6-month chart, 8 July 2021
Topics Covered

(2:00) What is driving the surge in rates, how sustainable are they?


(6:30) What charter durations are preferable? Discount rates?


(9:00) Any potential for forward fixtures into 2022?


(12:30) What assumptions play into the economics of the new purchase?


(18:45) Target leverage for the latest acquisition?


(20:45) Any appetite for further vessel acquisition deals?


(24:00) Not many public company buyers… Private asset buyers?


(26:30) Split between charter-free values and charter discounts?


(30:15) Economic tradeoff between secondhand and newbuilds?


(33:00) Do smaller and midsize ships play a viable role in the future?


(38:15) Will environmental regulations threaten middleaged tonnage?


(47:45) What is your target balance sheet leverage?


(51:00) GSL has a higher average cost of debt: savings potential?


(55:30) Any appetite for more preferred equity?



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Gary Vogel, CEO of Eagle Bulk Shipping (EGLE), a dry bulk shipping company focused on the mid-sized segments, joined J Mintzmyer's Value Investor's Edge Live on 9 June 2021 to discuss the rapidly improving market outlook and company specific plans.
EGLE is benefiting from surging rates and is expected to report a blow out Q2 earnings report followed by an even stronger showing in Q3. Although market conditions can change and dry bulk is notoriously volatile, the supply side is the most bullish we have seen in 20+ years and the signals from demand are also encouraging. Gary talks through the markets in our interview as well as about capital allocation specifics and strategy for Eagle Bulk in particular. 
This interview contains relevant insights for investors in all other dry bulk companies, including: 2020 Bulkers (Oslo: 2020), Diana Shipping (DSX), Eagle Bulk (EGLE), Eurodry (EDRY) Genco Shipping (GNK), Golden Ocean (GOGL), Grindrod Shipping (GRIN), Navios Partners (NMM), Pangaea Logistics (PANL), Safe Bulkers (SB), Seanergy Maritime (SHIP), and Star Bulk Carriers (SBLK).
Topics Covered

(0:00) Introductions and disclosures


(1:40) What is driving the steady strength in midsize dry bulk markets?


(4:15) What is the impact of the Australia-China coal shifts?


(5:30) Why are Capesizes far more volatile at this time?


(7:15) Why are 2022 FFAs still considerably below current market levels?


(9:30) Any activity or inquiries in the longer-term charter market?


(12:15) Discussion on rate hedging via derivatives.


(13:45) Capital allocation priorities? Target leverage?


(16:30) Commentary on ATM facility? Usage here?


(19:00) Potential for a dividend policy/program?


(21:00) Improving share liquidity? Lack of options trading?


(23:00) Potential for further sector consolidation?


(24:45) Impact from EEXI or tonnage tax?


(28:30) Current scrubber spreads? Plans to hedge savings?


(32:00) Discussion on proper benchmark for rates.


(34:15) What are the major risk factors at this point?


(38:30) When are potential newbuild yard slots available?


(40:30) Any desire to lock in 1-year rates yet?


(42:30) Why choose to invest in EGLE vs. peers?


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Lois Zabrocky and Jeff Pribor, CEO and CFO of International Seaways (INSW), joined J Mintzmyer's Value Investor's Edge Live on June 11, 2021, to discuss the crude and product tanker markets and forward prospects. We also reviewed company-specific plans and capital allocation priorities after they complete the merger with Diamond S Shipping (DSSI). International Seaways will then become one of the largest publicly-traded tanker companies and is poised to increase repurchases as part of a balanced capital allocation program. INSW is also preparing a $1.10/sh special dividend as part of their merger program. 
This interview and discussion is relevant for anyone with crude or product tanker investments, including Ardmore Shipping (ASC), DHT Holdings (DHT), Euronav (EURN), Frontline (FRO), Hafnia Tankers (Oslo: HAFNI), Navios Acquisition (NNA), Nordic American Tankers (NAT), Pyxis Tankers (PXS), Scorpio Tankers (STNG), Teekay Tankers (TNK), Torm Plc (TRMD), Tsakos Energy Navigation (TNP), or Okeanis Eco Tankers (Oslo: OET). 
Topics Covered

(0:00) Intros/Disclosures

(2:00) Crude tanker market update, are we past the worst?


(6:00) Outlook for product tanker market vs. crude?


(10:30) Potential impact from EEXI and/or bunker tax proposals?


(14:00) Any risks from ‘green recycling’ requirements?


(19:00) Overall commentary on DSSI merger.


(21:15) Why does INSW trade at a massive discount to peers?


(26:45) Potential for repurchase after the DSSI merger closes?


(30:15) Potential for a tender offer?


(32:00) Commentary on future dividend potential/plans?


(34:45) Plans/potential for the FSO joint-venture?


(40:30) Review of the dual-fuel LNG economics.


(49:00) Why buy INSW vs. other tanker peers?


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In this special edition of the Marketplace Roundtable, Daniel Shvartsman interviews J Mintzmyer, Head of Research at Value Investor's Edge. J reviews the containership sector, the latest market conditions, and outlines the bullish thesis in the containership sector. The discussion reviews sector dynamics along with several top picks in the sector. The shipping sector is off to a very strong start in 2021, with YTD model portfolio returns of 136.6% (Speculative Plays) and 69.4% (Best Risk/Reward) on J's exclusive research platform: Value Investor's Edge.
Topics Covered

2:30 – Catching up on the containership market

5:30 – The myths around containerships

10:00 – The impact of the underlying ZIM stake on Danaos Corp (DAC)

12:00 – Supply chain gives and takes for the containership sector

17:30 – Not anchoring on the price

19:00 - Why containership stocks don’t directly follow rates

22:30 – Interest rate risk and inflation risk for containership lessors

26:30 – Valuing these companies given the cyclical nature of the business

32:00 – Favorite names for investors and traders

35:00 – Bear case scenarios for containerships

37:30 – Broad review of other shipping segments


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Hamish Norton, President of Star Bulk Carriers (SBLK), Co-CFOs Christos Begleris and Simos Spyrou, and SBLK Head of Research Constantinos Simantiras joined J Mintzmyer's Value Investor's Edge Live on June 8, 2021, to discuss the dry bulk markets and forward prospects and capital allocation. Star Bulk Carriers is the largest US-listed dry bulk company with 128 vessels on the water. With rates surging, SBLK is focused on the '2 Ds' of dividends and deleveraging. We expect to see substantial payouts throughout there year. 
This interview and discussion is relevant for anyone with dry bulk investments or interest in the overall sector, including Diana Shipping (DSX), Eagle Bulk (EGLE), Eurobulk (EDRY), Genco Shipping (GNK), Grindrod Shipping (GRIN), Golden Ocean (GOGL), Navios Maritime (NM), Navios Maritime Partners (NMM), Pangea Logistics (PANL), Safe Bulkers (SB), Scorpio Bulkers (SALT), and Seanergy Maritime (SHIP).
Topics Covered


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