But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Why attractive leverage ratios get investors’ attention
Compared to the industry average and industry peers, NAT trades at the lowest debt to equity and debt to assets ratio which exposes the company to minimal risk, but maximum shareholder returns.
In the future, the company estimates that after the acquisition of vessels or other forms of expansion of vessels, NAT should be able to pay higher dividend per share and produce higher earnings per share.
Improving operational performance is clearly indicated by the company with observations per inspection for the 1Q14 reduced to just 3.4 observations—an excellent result and considered industry best practice.
The formation of NAO is based on the similar business model as NAT—it’s expected to generate clear synergies between the two companies with a major focus on general and administrative costs.
NAT maximizes its cash flows by employing all of its vessels in the spot market through the Orion pool—the spot market gives better earnings than the time charter market over time.
In the fall of 2004, NAT owned three vessels and at the end of 2013 it owned 20 vessels—Suezmax tankers—with tankers averaging ~156,000 deadweight tonnage (or dwt) each.
Year-to-date (or YTD) deliveries in 2014 stood at 25.7 million dwt.
In trading, the Baltic Dry Index declined to 850 on June 30, 2014, from 934 at the beginning from the month.
China’s economy is showing encouraging signs as the government’s policy measures have taken shape.
Global crude steel production increased at an annual 2.2% rate in May to 141 million tons as output in China hit new record levels.
In order to support the housing sector, Beijing planned cuts in taxes and loosened monetary policy to ramp up activity in the sector.
Meanwhile, total generation capacity stood at 1,251.22 gigawatts (or GW)—a 9.4% YoY increase.
For the first half of 2014, China’s coal imports stood at 159.87 million metric tons—an increase of 0.9% from the same period last year.
Imported iron ore prices in China continue to indicate a softer upward movement with no significant change seen in domestic iron ore prices.
Although shipments from Australia have surpassed their 2013 end levels, Brazil is yet to breakout of its previous highs.
June exports through the port increased 21% compared to the volumes last year.
DryShips Inc. (DRYS) and Navios Maritime Holdings Inc. (NM) are the two major market players in the dry bulk shipping industry.
Scorpio Tankers has no direct competitors for the purpose of relative valuation as other large players are in the very large gas carrier (or VLGC) industry.
During the 2Q14, Scorpio Tankers (STNG) acquired 11.5 million of its common shares that are being held as Treasury shares.
The company maintains its policy to fund its fleet growth through raising equity and maintaining low leverage levels.