xun

Xun Yao Chen

Xun is an analyst based out of Market Realist's New York City office and was formerly an investment analyst for four years. Previously Xun worked at Puji Capital, a hybrid investment bank and private equity firm based in Shanghai. He was also formerly a business consultant for Mic.co in his native Japan. Xun graduated summa cum laude from Boston University, with dual degrees in Economics and Business Administration.

Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.

More From Xun Yao Chen

  • uploads///Darden Restaurant DRI Share Price    e
    Consumer

    Darden analysis: Assessing the success of a Darden brand spinoff

    Darden Restaurants Inc. (DRI) has jumped since the Wall Street Journal mentioned that Barington Capital Group took a 2.8% stake, calling on Darden to split in two.

    By Xun Yao Chen
  • uploads///Employment    e
    Consumer

    Why more Europeans could be eating at McDonalds and Yum!

    Employment could be turning around The below chart shows employment growth for countries in Europe. The Eurozone, which only includes countries using the euro (so, excluding the United Kingdom and Russia), has been experiencing a declining growth rate over the past two years. While the overall growth was in positive territory from mid-2010 to mid-2011, […]

    By Xun Yao Chen
  • uploads///Potash Sales Price    e
    Basic Materials

    Why India’s potash price discount won’t affect share prices

    The significance of potash price Wholesale potash price is one of two factors (the other being sales volume) that influence potash producers’ revenues. When prices rise, so does revenue, which will translate to higher profitability (margins), earnings, and share prices. However, when prices fall, they will have a negative impact on fundamentals and share prices. […]

    By Xun Yao Chen
  • uploads///Crude Tanker  Years Old Price
    Energy & Utilities

    Why current secondhand oil tanker values suggest a mixed outlook

    While the VLCC data is positive, the picture for the crude tanker business remains mixed. This could portray a short-to-medium-term negative outlook.

    By Xun Yao Chen
  • Energy & Utilities

    As China’s key coal imports fall to just ~0%, is there an upside?

    As thermal power output growth has fallen, so has the growth for China’s coal imports from Indonesia and Australia—the two key countries that supply seaborne coal.

    By Xun Yao Chen
  • uploads///Potash Capacity and Operating Rate Forecast Q
    Basic Materials

    Was Uralkali’s new business strategy really Canpotex’s fault?

    Uralkali’s latest move might be considered a punishment. But also note that outside forces can create a more competitive environment.

    By Xun Yao Chen
  • uploads///China Government Y Credit Default Swap    e
    Industrials

    Why China’s bear case economic growth will hurt dry bulk stocks (Part 3)

    Continued from Part 2 Credit default swap and the Chinese economy Credit default swap (CDS) is an instrument investors use to protect a debt investment from defaulting over a specific period in exchange for a payment. Like insurance, the price of a credit default swap depends on the expected likelihood of default. When the probability […]

    By Xun Yao Chen
  • Energy & Utilities

    Why a pullback in orders is normal in a dry bulk shipping upcycle

    On November 1, ship orders for all key dry bulk vessel classes fell. Ship orders reflect managers’ expectations of future supply and demand differences.

    By Xun Yao Chen
  • uploads///Potash Consumption by Crop and Region
    Basic Materials

    Why is the end use of potash internationally diversified?

    As crops widely trade in the international market, they often converge with each other if transportation costs aren’t so high.

    By Xun Yao Chen
  • uploads///Dardens Competitor Performance
    Consumer

    Darden analysis: Why lower average checks are outperforming

    Adding a little bit of spice to the chart After compiling a list of Darden’s core competitor brands, which include Bravo Brio Restaurant Group Inc. (BBRG), Bloomin’ Brands Inc. (BLMN), Cheesecake Factory Inc. (CAKE), Texas Roadhouse Inc. (TXRH), Ignite Restaurant Group Inc. (IRG), Brinker International Inc. (EAT), and Dine Equity Inc. (DIN), we’ve added a […]

    By Xun Yao Chen
  • uploads///China Industrial and Electricity Output
    Energy & Utilities

    China’s key economic conditions: Industrial and electricity output

    Because reporting entities sometimes like to dress their numbers up a bit to look nice, analysts also look at electricity output—where government officials say they don’t have much incentive to cook the numbers.

    By Xun Yao Chen
  • uploads/// World Urea Production Cost
    Basic Materials

    Why industry capacity changes also affect urea prices and profits

    Generally, a capacity increase tends to lag demand growth, as producers like to see a stronger market before making significant investments.

    By Xun Yao Chen
  • Industrials

    Dry bulk shipping weekly analysis (Part 3: Construction rises)

    Continued from Part 2 Ship construction activity Part 2 of this series explains how ship orders can illustrate managers’ expectations for future supply and demand differentials. But new ship orders don’t always translate into new constructions right away. Sometimes, shipping firms specify a particular date of delivery for the new orders. If the delivery date is farther […]

    By Xun Yao Chen
  • uploads///Baltic Clean Tanker Index YoY    e
    Energy & Utilities

    Product tanker rates remain low, weakness among product industry

    Shipping rates: A leading indicator The single most important indicator that affects tanker companies’ performance is shipping rates. One well-established index that tracks the price of shipping refined oil across the ocean for representative routes is the Baltic Dirty Clean Index. Compiled daily by the Baltic Exchange for rates settled in the spot market on […]

    By Xun Yao Chen
  • Energy & Utilities

    Orderbook shows divergence between product and crude tankers

    The divergence we’ve seen between orders for product tankers and crude tankers reflects in share prices.

    By Xun Yao Chen
  • uploads///Dry Bulk Capacity    e
    Energy & Utilities

    Current positive data shows supply to grow below 7% in 2013

    In a highly commoditized industry like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to utilize idle ships and cover fixed costs. This will lower day rates, which will negatively […]

    By Xun Yao Chen
  • uploads///Floor Space Under Construction
    Energy & Utilities

    Chinese investing in cars and real estate drives dry bulk demand

    As long as developers continue to snatch up land, more iron ore and coal will be needed at steel mills, which is generally positive for dry bulk shippers.

    By Xun Yao Chen
  • uploads///Dardens Real Estate Expense    e
    Consumer

    Darden analysis: Key benefits of a restaurant owning properties

    Owning properties reduces real estate costs A restaurant business that owns its own building is a bit different from a restaurant business that rents its buildings or lands. From a business standpoint, you can think of a restaurant that owns its buildings as the sum of two businesses: restaurant and real estate. Because the real […]

    By Xun Yao Chen
  • Industrials

    We just need decent ship orders for dry bulk shippers to recover

    Managers remain optimistic From September 13 to 20, ship orders for Capesize vessels fell by 0.25%, from 10.53% to 10.28%, as a share of the existing number of ships. Orders for Panamax improved from 15.34% of existing ships to 15.87%, while those for Supramax were up slightly, rising 0.04% to 4.64%. Analysts use a percent […]

    By Xun Yao Chen
  • uploads///Untitled
    Energy & Utilities

    Capesize rates take out 2012 high, a key driver of share prices

    Taking out 2012’s high is important because it reflects tighter supply and demand dynamics than last year, which means higher revenue and earnings from Capesize vessels this year compared to 2012.

    By Xun Yao Chen
  • uploads///Crude Tanker Newbuild Price
    Energy & Utilities

    Newbuild tanker prices rose, but you should still use caution

    October’s increase is generally positive for the long-term prospects of tanker stocks like Frontline ltd. (FRO) or Nordic American Tanker Ltd. (NAT).

    By Xun Yao Chen
  • uploads///Crude Tanker Capacity    e
    Energy & Utilities

    Weekly tanker digest: Have fundamentals changed? (Part 4)

    Continued from Part 3 The importance of capacity Capacity, in a commoditized industry like shipping, is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to use idle ships and cover fixed costs. This will lower day […]

    By Xun Yao Chen
  • uploads///Contract Premium
    Energy & Utilities

    Why Diana will outperform Safe Bulker and Navios Maritime

    The two main markets for shipping companies, such as DryShips Inc. (DRYS), Diana Shipping Inc. (DSX) and Safe Bulkers Inc. (SB), are spot (voyage) and time charter (period). Companies that engage in the spot market will charge a one-time fee that customers pay to have a specified amount of goods shipped from one destination to […]

    By Xun Yao Chen
  • uploads///US Consumer Price Index    e
    Consumer

    Why low inflation reflects weak sales but is a long-term positive

    CPI growth running below 2.0% The most widely reported inflation rate is the CPI (Consumer Price Index). Since May 2012, US consumer inflation (measured by the year-over-year change in the consumer price index) has generally stayed below 2.0%. In August 2013, the overall inflation rate stood at 1.5% compared to the same month last year, […]

    By Xun Yao Chen
  • uploads///China Real Estate Climate    e
    Industrials

    Below-average Real Estate Climate Index is positive for shipping

    The significance of the real estate climate index The last indicator that investors could use to get an understanding of the real estate situation in China is the Real Estate Climate Index. The National Bureau of Statistics developed this index to capture the trends and situation in the property market using eight indicators related to […]

    By Xun Yao Chen
  • uploads///Baltic Shipping Index by Ship Class    e
    Industrials

    Why shipping rates for Capesize vessels continue to outperform

    Investors can look forward to higher Capesize rates during the second half of this year compared to the first half, which is positive for dry bulk shippers.

    By Xun Yao Chen
  • uploads///Capesize Time Charter Forward Agreements    e
    Industrials

    Market Realist dry bulk shipping blast (Part 6: Forward rates)

    Continued from Part 5 What are forward contracts? If there are shipping rates for today, then there’s also the expectation of tomorrow’s rates. Companies use forward contracts to lock in the availability of resources in the future at a set price. The dry bulk shipping industry—which transports key dry bulk materials such as iron ore, coal, […]

    By Xun Yao Chen
  • uploads///Baltic Shipping Index by Ship Class    e
    Industrials

    Shipping stocks rise as Capesize rates approach $20,000

    From August 23 to 30, shipping rates for Panamax, Supramax, and Capesize vessels stood relatively unchanged.

    By Xun Yao Chen
  • uploads///China Imported Iron Ore Price    e
    Industrials

    Iron ore shipments rose in June due to demand, positive for dry bulk shipping

    China’s iron ore import data China’s iron ore import is a key driver of shipping demand, making up more than 75% of the world’s total iron ore shipments. So China’s import rising is positive for shipping rates—Capesize vessels in particular—which can give short-term support to share prices and a medium-term boost to companies’ financials. While […]

    By Xun Yao Chen
  • uploads///Baltic Dry Index    e
    Industrials

    Market Realist dry bulk shipping blast (Part 5: Shipping rates)

    Continued from Part 4 Supply and demand drives dry bulk shipping companies Although we must analyze demand  in order to project future dry bulk shipping rates, imports data aren’t widely available on a weekly basis. But shipping rates, which reflect the difference in demand and supply, are collected on a daily basis at the London-based Baltic […]

    By Xun Yao Chen
  • uploads///China Interbank Repo  Months    e
    Industrials

    China’s interbank lending rate falls below 6.0%, positive for dry bulk shipping?

    Update to Must-know: Shipping companies hit by China’s financial woes The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it […]

    By Xun Yao Chen
  • uploads///China Inflation    e
    Industrials

    Must-know: Commodity prices and dry bulk shipping stocks (Part 1: Inflation and steel)

    Inflation, the economy, and shipping Commodity prices often rise when growth in demand exceeds growth in supply. This generally happens during the recovery or expansionary stage of an economic cycle, because producers are often unable to keep up with the rapid increase in orders. So inflation is often a positive indicator of economic health, which […]

    By Xun Yao Chen
  • uploads///China Daily Steel Output    e
    Industrials

    Early July steel output falls steeply, worrisome for dry bulk shipping stocks?

    China’s steel output China’s steel output is a leading indicator of iron ore and coal demand. When steel output declines, the fall is often due to adjustments to weaker demand. As China makes up 70% of the world’s total iron ore imports, lower steel output will translate to fewer iron ore imports. This will hurt […]

    By Xun Yao Chen
  • uploads///Crude Tanker Price  Years Old    e
    Energy & Utilities

    Why 15-year ship prices point to negative outlook for tanker stocks and earnings

    Why ship prices (value) matter Ship prices (values) are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders of ships, which drives up purchase prices. Additionally, when firms are able to charge higher prices for transporting goods across the […]

    By Xun Yao Chen
  • uploads///YOY BDI
    Energy & Utilities

    The Baltic Dry Index fell in January but annual growth is positive

    The Baltic Dry Index (a benchmark that reflects the overall shipping rate for transporting dry bulks such as iron ore, coal, and grain across the ocean) has fallen quite a bit since the start of the year.

    By Xun Yao Chen
  • uploads///China Interbank Repo  Months    e
    Energy & Utilities

    Must-know: Shipping companies hit by China’s financial woes

    The impact of China’s financial industry The financial industry is an essential part of an economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So, a collapse in the financial industry would grind […]

    By Xun Yao Chen
  • Industrials

    Shipping capacity growth breaks below 7%, first time since 2009

    Why is capacity important? Capacity is an important factor that directly impacts companies’ top line (revenue) in a highly commoditized industry, like shipping. When capacity grows faster than what’s demanded, competition rises among individual shipping firms as they try to use idle ships and cover fixed costs. This lowers day rates, which negatively affects bottom […]

    By Xun Yao Chen
  • uploads///Global Iron Ore Imports    e
    Industrials

    Why China’s interbank rates have an impact on dry bulk shipping companies

    The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So, a collapse in China’s financial industry would grind […]

    By Xun Yao Chen
  • uploads///Starbucks and Arabica Coffee
    Consumer

    Why high valuation and coffee prices drove Starbucks down ~13%

    As store count grew over the past few years, Starbucks’ forward P/E valuation metric also expanded. What used to be just 17x gradually grew to roughly 27x, a 58% based solely on expansion in the valuations.

    By Xun Yao Chen
  • uploads///Baltic Dry Rates e
    Industrials

    Shipping indexes rise, driving dry bulk shipping company shares

    It’s been a while since the dry bulk shipping index has had such as large impact on the share prices of shipping companies. This reflects the fact that the market wasn’t really expecting such an increase.

    By Xun Yao Chen
  • Energy & Utilities

    7 points that reflect tanker fundamentals say recovery isn’t looming (Part 4)

    Continued from Part 3 The importance of capacity Capacity, in a commoditized industry like shipping, is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to use idle ships and cover fixed costs. This will lower […]

    By Xun Yao Chen
  • uploads///Industry Sector and Market Performance    e
    Energy & Utilities

    An ETF that invests in Soros’s dry bulk shipping experiment

    Investors seeking exposure to dry bulk shipping who don’t want to buy six companies like Soros did can use the Guggenheim Shipping ETF (SEA).

    By Xun Yao Chen
  • uploads///US Crude Oil Rotary Rig Count    e
    Energy & Utilities

    US oil production expected to hit record in 2013, negative for tankers

    US oil rig count is a leading indicator of US oil production and oil imports. Since 2008, a boom in US oil industry has negatively impacted demand for tankers (see Tankers will likely underperform dry bulk ships in 2013)— vessels that transport oil across ocean. Higher US oil production, due to application of technologies called […]

    By Xun Yao Chen
  • uploads///China PMI
    Energy & Utilities

    Ignore HSBC, China’s official PMI aids shipping

    As the largest importer of raw material in the world, manufacturing activity in China is one of the most influential factors of shipping demand. When manufacturing activity rises, China will import more dry bulk raw materials, such as iron ore, coal, and grain. This will support shipping rates, which positively affects dry bulk shipping companies’ […]

    By Xun Yao Chen
  • uploads///OECD Leading Indicator
    Energy & Utilities

    Why the OECD leading indicator drives dry bulk shipping cycles

    Because the month-to-month data can contain short-term statistical noise that doesn’t reflect long-term fundamental changes, a six-month change or year-over-year change is often used.

    By Xun Yao Chen
  • uploads///Dry Bulk Shipping Stocks    e
    Industrials

    Why you should watch 7 key industry indicators for shipping fundamentals (Part 1)

    Dry bulk shipping companies lag behind economic recovery Despite the U.S. stock market surpassing its 2008 highs recently, with the Dow Jones Industrial Index hitting 15,464.30 and S&P 500 hitting 1,680.19 as of July 12, 2013, dry bulk shipping companies have done poorly. These companies primarily transport raw materials such as iron ore, coal, and […]

    By Xun Yao Chen
  • uploads///Crude Oil Price    e
    Energy & Utilities

    Egypt tension pushes oil past $109, shipping rates rise, but downside for tankers

    Tanker stocks tied to oil prices Tanker stocks often move in tandem with oil prices in a demand-driven market. But because tanker companies also use oil to run their ships, a price increase in oil due to supply shocks (such as political disruptions in the Middle East) also affects tanker firms differently. To get a […]

    By Xun Yao Chen
  • uploads///Inflation CPI    e
    Energy & Utilities

    Low inflation supports availability of monetary stimulus, positive for shipping stocks

    Inflation’s impact on spending and investment Central banks often set a target on inflation rate because a mild inflation rate encourages people to spend more, while it also points out that demand is rising more than supply—a situation that suggests a growing economy. When inflation is high, however, central banks will use monetary policies to […]

    By Xun Yao Chen
  • uploads///Contract
    Energy & Utilities

    Maturing contracts present significant downside for certain shipping firms

    The two main markets for shipping companies, such as DryShips Inc. (DRYS), Diana Shipping Inc. (DSX), Navios Maritime Partners LP (NMM) and Safe Bulkers Inc. (SB), are spot (voyage) and time charter (period). Companies that engage in the spot market will charge a one-time fee that customers pay to have a certain amount of goods […]

    By Xun Yao Chen
  • uploads///China Imported Iron Ore Price    e
    Industrials

    Imported iron ore prices hit $125 per metric tonne, positive for dry bulk shipping

    Commodity prices and shipping Commodity prices are leading indicators of an economic cycle. Because suppliers of raw materials require time to ramp up production, an increase in demand during an economic expansion will often lead to higher prices. As a result, commodity prices correlate highly with shipping. Iron ore prices On July 5, the price […]

    By Xun Yao Chen
  • uploads///Natural Gas Realized Price
    Basic Materials

    Why fertilizer companies’ exposure to natural gas prices varies

    Companies forfeit the opportunity to benefit from lower natural gas prices when they hedge. But hedging activity protects companies’ earnings when natural gas prices rise.

    By Xun Yao Chen
  • Energy & Utilities

    Capacity growth portrays short-term negative but long-term positive for shipping

    In a highly commoditized industry, like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to utilize idle ships and cover fixed costs. This will lower day rates, which will negatively […]

    By Xun Yao Chen
  • uploads///Cyclicality
    Energy & Utilities

    Recommendation: Capitalize on dry bulk shipping’s cyclical waves

    The dry bulk shipping industry is cyclical mainly due to economic or business cycles as well as a long lead time between the placement of orders and the delivery of new vessels.

    By Xun Yao Chen
  • Energy & Utilities

    Shipping recovery continues with additional purchases, long-term opportunity

    Ship orders apply most to long-term investments Ship orders reflect managers’ assessments of the industry’s future demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new vessels.[1. Dry bulk shipping companies […]

    By Xun Yao Chen
  • uploads///Baltic Shipping Index by Ship Class    e
    Industrials

    Dry bulk shipping rates rise due to restocking, but likely downside looming

    The dry bulk shipping industry’s service is commoditized. So, supply and demand balance is one of the most important drivers for dry bulk companies’ top- and bottom-line performances.

    By Xun Yao Chen
  • uploads///Grain price and Urea
    Basic Materials

    2 key things that set the floor and ceiling for urea prices

    Without an understanding of factors that affect crop prices, it would be difficult to formulate a view on future crop prices and demand for nitrogenous fertilizers.

    By Xun Yao Chen
  • uploads///Dry Bulk Vessel Prices  Years Old    e
    Industrials

    Ship prices rise to 8-month high, supporting dry bulk shipping recovery

    Why should you watch ship purchase prices? Purchase prices for ships are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders, which drives up purchase prices. Additionally, when firms are able to charge higher prices for transporting goods across […]

    By Xun Yao Chen
  • Energy & Utilities

    Why high shipping capacity growth will continue to pressure tanker earnings

    Update to Shipping capacity growth drops but outpaces demand, negative for tanker stocks The importance of capacity In a highly commoditized industry, like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try […]

    By Xun Yao Chen
  • uploads///China Iron Ore Price    e
    Basic Materials

    Why iron ore prices rising to two-month high is positive for dry bulk shippers

    Commodity prices and shipping Commodity prices are leading indicators of an economic cycle. Because suppliers of raw materials require time to ramp up production, an increase in demand during an economic expansion will often lead to higher prices. As a result, commodity prices correlate highly with shipping. Iron ore prices On July 25, the price […]

    By Xun Yao Chen
  • uploads///Baltic Clean Tanker Index    e
    Energy & Utilities

    Neutral shipping rates mean fleet expansion, driving share prices

    Shipping rates affect companies’ revenues The single most important indicator that affects tanker companies’ top-line revenue is shipping rates, which influence profitability margins, earnings, and share prices. So traders and analysts often look at shipping rates. Shipping rates generally fall because of looser supply and demand dynamics. On the other hand, shippers can achieve higher […]

    By Xun Yao Chen
  • uploads///Baltic Shipping Index by Ship Class    e
    Industrials

    Why Capesize vessels are outperforming other ship vessels in rates

    Supply and demand drives dry bulk shipping companies Unlike imports data that aren’t widely available on a weekly basis, shipping rates (which reflect the difference in supply and demand) are collected daily at the London-based Baltic Exchange and published as the BDI (Baltic Dry Indexes). These indexes reflect the daily shipping rates to transport key […]

    By Xun Yao Chen
  • uploads///New Red Lobster Differences
    Consumer

    Why a standalone Red Lobster is key to the brand’s survival

    Post-separation Red Lobster is expected to have more tailored operating initiatives focused on “maintaining stable sales by retaining core guests.”

    By Xun Yao Chen
  • uploads///Global Iron Ore Imports    e
    Industrials

    Why China remains a risk for dry bulks as bank interest rate stays above average

    The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So a collapse in China’s financial industry would grind […]

    By Xun Yao Chen
  • uploads///US Crude Oil Rotary Rig Count    e
    Energy & Utilities

    Why the flat oil rig count won’t hinder product tanker demand

    US rotatory rig count: The forefront of future oil production The US Crude Oil Rotary Rig Count is a valuable indicator that shows how much drilling activity is occurring in the United States, tracking the number of rotating drills that are drilling into the Earth’s crust in search of oil or developing oil wells. The […]

    By Xun Yao Chen
  • uploads///Steel producers in developed Asian countries e
    Industrials

    Contrarian approach: why high valuation multiple is positive for shipping stocks (dry bulk)

    Valuations can often tell investors the outlook of equities in the near future. Although value investors often look for valuations that are low, high valuations can often signal better times ahead. This is especially true for cyclical companies, such as steel producers and shipping companies, as has been mentioned by Peter Lynch in his famous […]

    By Xun Yao Chen
  • uploads///China Interbank Repo  Months    e
    Energy & Utilities

    Must-read: Financial woe abroad drags tankers down, outlook negative

    Continued from Why oil price is a key driver of tanker stocks The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively […]

    By Xun Yao Chen
  • uploads///shaah shahidh subrrYxvA unsplash
    Energy & Utilities

    Panamax vessel price reveals low dry bulk orders, negative implication

    The price of a Panamax ship depends on two factors: the amount of cash the ship can generate within its useful life and the cost of steel.

    By Xun Yao Chen
  • uploads///Crude Tanker Orders Ratio    e
    Energy & Utilities

    Weekly tanker digest: Have fundamentals changed? (Part 2)

    Continued from Part 1 The significance of ship orders One measure that reflects managers’ assessment of future supply and demand differences is the number of ships on order. When managers expect future demand to increase more than supply, if they also expect to generate profits with the investment, they will often place new ship orders. But […]

    By Xun Yao Chen
  • uploads///Tanker Index and Key Stocks
    Energy & Utilities

    Why tanker vessel prices continue to rise despite China concerns

    Investors can also view vessel values as a tool to get an idea of what industry insiders, such as brokers and shipping managers, are thinking.

    By Xun Yao Chen
  • uploads/// Cost Curve
    Basic Materials

    China might cut its urea export tax in 2015, helping Agrium and CF

    Industry experts often show ex-China global urea capacity utilization because China’s export tax makes domestic producers’ urea more expensive for international buyers.

    By Xun Yao Chen
  • uploads///Steel Producers in Developed Asian Countries    e
    Energy & Utilities

    Divergence in steel multiples and share prices spell positive shipping outlook

    Valuations can often tell investors the outlook of equities in the near future. Although value investors often look for valuations that are low, high valuations can often signal better times ahead. This is especially true for cyclical companies, such as steel producers and shipping companies, as has been mentioned by Peter Lynch in his famous […]

    By Xun Yao Chen
  • Energy & Utilities

    Shipping industry recovery is real, but timing remains uncertain

    Ship orders reflect managers’ assessments of the industry’s future demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new vessels.[1. Dry bulk shipping companies engage in the transportation of dry raw […]

    By Xun Yao Chen
  • Energy & Utilities

    Weekly product tanker capacity growth rises, crude tanker falls

    While annual capacity growth still remains above 3.5% for crude tankers and even higher for product tankers, it has come down since April, which is a positive sign.

    By Xun Yao Chen
  • uploads///Dry Bulk Vessel Prices  Year Old    e
    Industrials

    Dry bulk shipping weekly analysis (Part 10: Ship prices)

    Continued from Part 9 Why should you watch ship purchase prices? Purchase prices for ships are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders, which drives up purchase prices. Plus, when firms are able to charge higher prices […]

    By Xun Yao Chen
  • uploads///Dry Bulk Vessel Orders
    Energy & Utilities

    Dry bulk shipping at inflection point, order trend remains positive

    Ship orders are useful metrics in uncovering managers’ perspectives of the industry’s long-term demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new bulk vessels.[1. Dry bulk shipping companies engage in […]

    By Xun Yao Chen
  • Energy & Utilities

    Frontline has options, but they’ll likely put the company behind

    There are several things Frontline can do to pay its maturing $190 million bonds. But activities such as selling assets or raising additional capital would likely put Frontline behind its peers.

    By Xun Yao Chen
  • uploads///China Crude Oil Import
    Energy & Utilities

    Key tanker stock drivers: China’s crude oil import volume

    China’s crude oil import: The most important factor An indicator that has a first-degree (direct) influence on tanker rates is China’s crude oil import volume. When import volume rises, more tankers will be in use, which pushes up shipping rates. Conversely, lower import volume means an increased number of idled ships, which leads to increased […]

    By Xun Yao Chen
  • uploads///Dry Bulk Shippers Stock Performance    e
    Industrials

    Morgan Stanley upgrades dry bulk and VLCC, SBLK, SB, DSX rally 10%

    Dry bulk shipping companies are rallying on Morgan Stanley’s review claiming that shipping is at the start of a two-year rally.

    By Xun Yao Chen
  • uploads///Baltic Dirty and Clean Tanker Indexes Change    e
    Energy & Utilities

    Crude tanker index 25% lower, product tanker index steady

    On August 30, the Baltic Dirty Tanker Index and Baltic Clean Tanker Index stood at 622 and 604, respectively.

    By Xun Yao Chen
  • uploads///Potash Capacity and Operating Rate Forecast Q
    Basic Materials

    Must-know: Mosaic’s forecast shows a possible upside limit in 2015

    Despite a recovery in 2014, investors should be warned about the longer-term outlook for the potash business.

    By Xun Yao Chen
  • uploads///US Dollar and Corn Price    e
    Basic Materials

    Why the US dollar affects fertilizer producer stocks and ETFs

    As commodities trade globally, often using the US dollar as a medium, price movements in the US dollar have important consequences for fertilizer producers.

    By Xun Yao Chen
  • uploads///Key Performancs
    Energy & Utilities

    Betting on a Chinese stock rebound? Crude tankers might be better

    On an industry level, crude tankers might be at the start of a multi-year turnaround. But crude tankers may also be a good option for investors if they don’t believe China will see a crash.

    By Xun Yao Chen
  • uploads///Wholesale Ammonia Prices and Brent Oil    e
    Basic Materials

    Why Chinese producers pressure global fertilizer prices

    The operating rate in China is below average Historically, the expense of using coal to produce nitrogen-based fertilizers has kept Chinese firms away from increasing production, because they would have had to sell the fertilizers at a loss. As a result, the operating rate (capacity utilization) in China has been lower than the rest of […]

    By Xun Yao Chen
  • uploads///Potash Shipments    e
    Basic Materials

    Why weak 3rd-quarter potash sales volume will only be temporary

    The importance of sales volume Companies’ sales and earnings revisions often have significant impact on share prices. Sometimes companies will announce revisions before earnings calls if they’re significant. When earnings are expected to be worse than initially mentioned, share prices can take a hit. Conversely, when management releases upbeat revisions, share prices often jump. Companies […]

    By Xun Yao Chen
  • uploads///Potash Price End of
    Basic Materials

    Why Uralkali’s potash contract rumor is more than just speculation

    Things are looking good for potash producers as of January 14 and 15, 2014, as stocks jumped on rumors of Uralkali asking for higher potash prices.

    By Xun Yao Chen
  • Industrials

    Why you should watch 7 key industry indicators for shipping fundamentals (Part 3)

    Continued from Part 1 Ship construction activity Part 2 of this series explains how ship orders can illustrate managers’ expectations for future supply and demand differentials. But new ship orders don’t always translate into new constructions right away. Sometimes, shipping firms specify a specific date of delivery for the new orders. If the delivery date […]

    By Xun Yao Chen
  • uploads///China Money Supply
    Energy & Utilities

    The key relationship between money supply and dry bulk shipping

    Money supply growth has important implications for the Chinese economy. If there’s too much money lying around, it can lead to inflation and speculative activities.

    By Xun Yao Chen
  • uploads///Breakdown of Dardens Upside Potential
    Consumer

    Must-know: 3 important things that could drive Darden up 45%

    However, shares do tend to fall following spinoffs, as they’re widely considered an inefficient means of distributing shares to investors.

    By Xun Yao Chen
  • Industrials

    Must-know: Weekly dry bulk shipping industry fundamentals update (Part 2)

    Continued from Part 1 The importance of ship orders One measure that reflects managers’ expectation of future supply and demand differences is the number of ships on order. When managers expect future supply to increase more than demand, they refrain from purchasing new ships. However, when they expect demand to outpace supply growth, companies return to […]

    By Xun Yao Chen
  • uploads///McDonalds Same Store Sales by Geography    e
    Consumer

    Are McDonald’s higher sales in Europe part of a larger trend?

    In this series, we uncover the key indicators investors should know to help them stay calm and position themselves correctly in the restaurant market. Investing is an art and a science. There is no secret formula.

    By Xun Yao Chen
  • uploads///Supply Demand Balance
    Energy & Utilities

    Dry bulks: NMM’s CEO says “we’re in a very early stage of recovery”

    Investors should recall that the shipping industry is highly cyclical, as demand for fleets is driven by economic cycles and supply is inelastic for about two years—the time it takes to build vessels.

    By Xun Yao Chen
  • uploads///China Manufacturing State PMI BDI    e
    Financials

    Why it pays to be patient about China’s manufacturing activity

    Because China is the largest importer of raw material in the world, China’s manufacturing is a key driver that affects shipping demand and rates.

    By Xun Yao Chen
  • uploads///LLS and Brent Crude Price
    Energy & Utilities

    Must-know: Why the U.S. could hit a light crude oil refining wall

    While U.S. oil imports have been falling over the last few years, tanker companies could benefit from a brighter outlook on U.S. oil imports in 2014.

    By Xun Yao Chen
  • uploads///Operating Margin    e
    Consumer

    Why Boston Beer Company is playing the Japanese car strategy card

    Investors shouldn’t only expect Boston Beer Company’s sales growth of approximately 17% to translate into equal growth in earnings.

    By Xun Yao Chen
  • uploads///Potash Deposits
    Basic Materials

    Why are economical potash deposits concentrated in 3 locations?

    Canada, Russia, and Belarus together account for more than 89% of the world’s estimated reserves and a little over 66% of global capacity.

    By Xun Yao Chen
  • uploads///Cyclicality of BDI
    Energy & Utilities

    Why we could see fewer volatile swings in dry bulk shipping stocks

    The recent volatility we’ve seen among dry bulk shippers can scare people into thinking they should trade in and out of the stock.

    By Xun Yao Chen
  • uploads///CPLP Earnings Per Share    e
    Energy & Utilities

    Why Capital Product Partners didn’t rally after beating estimates 400%

    Beating estimates Let’s begin with earnings since that’s often what analysts and investors look at. For the third quarter of 2013, which was released on October 31 in the morning, CPLP reported basic EPS of $0.35 per share, which was five times more than the estimate of $0.07 per share. Basic EPS of $0.35 a […]

    By Xun Yao Chen
  • uploads///US Crude Oil Rotary Rig Count Domestic Production    e
    Energy & Utilities

    U.S. oil production could slow in 2014, benefiting crude tankers

    As oil production appears to be lagging oil rig count by two to three years, U.S. oil production growth could start to show signs of slowing in 2014. That could be positive for demand for crude tanker companies.

    By Xun Yao Chen
  • uploads///Indian Rupee
    Basic Materials

    The Fed taper and Indian rupee could still hurt potash companies

    The Indian rupee has been under pressure this year due to two key factors: Ben Bernanke’s announcement of the Fed tapering that started off in June and deteriorating economic growth combined with high inflation.

    By Xun Yao Chen
  • uploads///Various customer market
    Consumer

    Must-know: Barington says Darden’s portfolio lacks brand focus

    When the Olive Garden and Red Lobster brands started to show slower growth, Darden’s CEO used diversification to promote growth.

    By Xun Yao Chen
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