08/05
Have two LNG shipping ideas in the port - FLNG and CLCO. The former is my largest shipping position. The latter was at one time a Top 10 holding. But, with multiple trimmings since May 2024, CLCO has dropped out of my Top 10 list. Through the weekend, FLNG was positive on a capital gain basis, while CLCO was positive on a Total return basis (i.e. including the dividend)
After today’s beat down, FLNG joined CLCO in needing the dividend to stay positive. FLNG became a long term hold after the company opted to fix the majority of its vessels. It went from 5 to 11 vessels fixed very quickly. Even the remaining two, those vessels had variable rate charters. Then one more FLNG vessel got fixed. So, only one vessel has a variable charter currently. This suggested the div could be maintained for several years. FLNG has even tossed in a special div two or three times. That’s the positive. On the flip side, FLNG is a shipping stock. In the normal course of a year, shipping names can bounce around. What happens when one layers on market worries? I guess, I’m feeling it now !
For CLCO, having realized gains, there’s less worry. Lowest gains have been > 11% in less than 4 months. When CLCO dipped below $11, it was very tempting. But, I paused. Yes, I know I could have lowered my cost basis. But with the market behaving as it is, it seemed risky. So, no CLCO trades today. That’s LNG shipping.
Other shipping flavors? Well, having seen gains flip to losses, I decided to harvest some FRO gains (much nicer than last week’s FRO gains). And, while I’m at it, it felt right to clean up the dry bulk names a little. So BDRY made an exit, and GOGL got trimmed. And an LPG purchase lowered the cost basis of that stake.