Greyinvestor
13 Sep 2016
EPS forecast down EPS forecast now down to 22p, divi forecast still 25p, which is getting uncomfortable.On the other hand the Baltic Dry Index is now rising.Could be further share price declines, but I'm a firm Hold for the long term. The S E Asia economies seem to be holding up well, and hopefully this bodes well for shipping in that area.
Bill1703
03 Sep 2016
Re: BMS value "On the divi front, they'll think carefully before cutting. They may put it off for a year.."Could be a but more binary than that, Grey - if this year really is the low point in earnings, they should either cut it now, or decide to use the balance sheet to keep paying out, on the basis that longer term profitability recovers on a sustainable basis. Would be odd to cut it just when earnings are already rebounding nicely? But I don't disagree it will receive careful thought.Looking at Reuters, the low end of the forecast range now sees EPS of 20.6p this year and 28.0p next (using mid-range figures is usually distorted by forecasts yet to be revised, and it looks like only 2 of 3 recorded coverage analysts have cut estimates in the past week or so). If this is anywhere near right (and it may well not be), you can just about see a case for holding the divi - but more realistically, a cut to 13p this year, rising to 14-15p next would make more sense. That is how I would advise them, anyway, if I were in such a position...A bid from Clarkson is an interesting thought - perhaps one we should spread more widely?! Clarkson are certainly big enough and they have the balance sheet to do it without too much stress. Not sure about the precise areas of overlap between the two, or whether there would be any competition issues - maybe not in this sphere?
soi
02 Sep 2016
Re: Took a bite HiI have exited at 366, made some chips, was hoping for more.Not negative on the stock and perhaps I`ve let a good buying opportunity slip by.I`d been following it for ages.Seems a sound company and I`d be happy for those with a longer term view to see it recover.GL Allsoi
Dingledangle
02 Sep 2016
Re: Hanjin [link] further bbc report on the problems facing Hanjin ships and crew now stuck at sea. Does BMS has any partnership interests with Hanjin cargo?Will continue to hold.
Greyinvestor
02 Sep 2016
BMS value I'd be the first to agree that the P/E looks too high, but I'm still holding.It's going to be a rough year but this could be a cyclical low in the shipping market. Just to contradict myself, there are a lot of ships laid up around the world and China must stop building 'stuff' at some point. However, the Indian economy is slowly picking up momentum, as is much of the developing world. Sooner or later demand will rise to meet supply.I did note that earlier in the year a lower level director in BMS, a Greek , was hoovering up shares, and had about 600,000 shares. He must have more than any other director, I would guess. The CEO is not a shipping man, more finance and deal making/selling companies. He doesn't own that many shares.A bid from Clarkson?On the divi front, they'll think carefully before cutting. They may put it off for a year..All good posts to this board, I think. Good stuff.
Bill1703
01 Sep 2016
Re: Big earnings downgrade "Cantor have downgraded and cut forecasts to 23p EPS this year."Thanks Gretel. 23p sounds about right, and possibly a bit better than feared - as per earlier posts. Not sure 16x is too high - hardly more than a in-line market rating, and if there is a reasonable hope that earnings can rebound to some extent subsequently, particularly with the mooted possible FX benefits... But it does suggest the current SP is fair value at best. Is there any forecast from Cantor as to what is to become of the 26p dividend? I am guessing that, like their other views, this remains "under review" - but it doesn't look good!
gretel
01 Sep 2016
Big earnings downgrade Cantor have downgraded and cut forecasts to 23p EPS this year.BMS will remain on my watchlist for a recovery in its markets, but a 366p share price puts BMS on a P/E of almost 16, which is surely too high. It may be difficult to sustain this price level imo at that rating. Here's Cantor's downgrade notes: "Profit warning – BMS has issued a profit warning. Tanker markets have seen lower activity levels and freight rates which has led to reduced revenues. In the dry cargo markets, the company states that despite healthy demand and good transaction volumes, overcapacity continues to depress freight rates to historically low levels. Cost cutting measures have been put in place to reduce costs in this area. BMS’s vessel sale & purchase and offshore desks continue to perform in line with management expectations, with similar levels of activity to the previous year. Generally, USD denominated earnings in these divisions will benefit from the weakness of GBP if the exchange rate is sustained at current levels. In the Technical services division, the slowdown in oil & gas exploration and new project work continues to impact surveying and engineering businesses, particularly in relation to offshore activity. To respond to these tough market conditions, the company has already made a number of senior management changes in the Technical division. The Logistics division continues to perform in line with management expectations. As a result of these events, earnings for the year ending 28 February 2017 for the group will be “materially” lower than for 2016. BMS further states that it is “well financed” with a strong balance sheet and “substantial” order book, cost cutting measures and new divisional management should lead to an improvement in underlying performance. We cut our forecasts for underlying operating profit for FY17 by over 30% to £9m and our EPS is cut by 24% to 23p. Cuts are made to divisional profits in Shipbroking and Technical. Our FY18 and FY19 forecasts are placed under review. Our recommendation is changed to HOLD from BUY, our TP is placed under review. Interim results will be released on Tuesday 25 October, 2016."
Bill1703
31 Aug 2016
Re: Calm reaction "Good to see you here Bill. Let us all know if you spot any bugs in the accounts..... "I have been a holder here for years, in which time the stock has gone basically nowhere - though the total returns have been okay with the good divi. I have never seen anything worrying in the accounts, always thought it a well-run business, with a rock solid balance sheet and strong free cashflows - the latter qualities are what attracted me in the first place.But they've always been at the mercy of external market conditions and forces over which they have no control - as you illustrate, Grey. They've diversified their business quite well within the wider sphere - but if conditions are against them, it's an inevitable case of battening down and sitting it out.Happy enough with where the SP is settling - but difficult to see much upside until conditions improve, particularly if we are going to have to sit it out with a lower yield.
Dingledangle
31 Aug 2016
Hanjin The Hanjin shipping line has entered receivership. Things are tough in this business at the moment, but much like the commodities sector things will bounce back once the weaker players are forced out. [link]
Greyinvestor
31 Aug 2016
baltic dry index If you plot this over 5 years, you'll see one of the key issues;[link] and Clarkson earn a percentage on shipping costs. If those go down, so does the income.Shipbroking seems to be well remunerated, because otherwise people hop to the competition. So a low Baltic Dry Index gives a steer that income will be low..........The good news is that rates seem to have bottomed. But if a recession comes, they'll drop again. It's all down to world trade.
energysaver
30 Aug 2016
Re: Took a bite bms has been on my watchlist for a long time. it sounds like a good well-run company wth a strong balance sheet. the only thing that puts me off - even now - is its low margins. its turnover has risen pretty substantially in the last five years, despite this and the big recent merger, its earnings have, if anything, declined. it is a bit vulnerable to bad trading conditions and competition.
Greyinvestor
30 Aug 2016
Calm reaction A calm reaction to the announcement today. That's good.I'm unchanged. My only reservation is the low director holdings.....Good to see you here Bill. Let us all know if you spot any bugs in the accounts.....
soi
30 Aug 2016
Re: Took a bite oops !359 of courseSorry.GLsoi
TX2
30 Aug 2016
Re: Profits warning Clutching at straws perhaps as like others here I see little point in selling,as Braemar has little need for additional capital to finance its business it should be able to pay out the larger part of its on going net profits as dividend.
Dingledangle
30 Aug 2016
Re: Profits warning Not much choice but to sit tight. Further cost cutting might feed through into better results in 12 months time. This has been a good dividend payer over the years, but todays 10% drop wipes out 2 years of dividends. I will hold but not adding more until the div cut is known (if indeed that happens)
