Treading into 2023

9/29
Final moves to end the quarter.

  • More ABEV (taxable ac)
  • More VFS (taxable ac)
  • More BRK-B (Roth ac)
  • More VZ (taxable ac)
  • More FLNG (Roth ac)

Per the board title - this was a roller-coaster quarter with highs in late July and a rough August and Sept. Spread between high and low, at least 7%

10/03
The last few days have turned into a nasty beatdown - especially in the taxable ac. Broad too - Finance, Utilities, Tech, Shipping, Retail – Ugh!

Yesterday - bought more FLNG, GSL [Edit: Also closed GLNG in taxable ac]
Today - I wait

10/06
Smaller moves today

  • More BROS in taxable ac
  • AEHR nibble in taxable ac
  • More FLNG in Roth ac
  • More CLCO in taxable ac

10/05
I completed a FRO trim - prior to reading an article on the Savery-Fredriksen battle for EURN, Seems the two sides are negotiating a carve-up of EURN (with supposedly 24 VLCCs migrating over to the FRO fleet). EURN shares had a major bounce on the news,

  • Added to ABEV in taxable ac

10/11
Port slowly clawing back and moving in the positive direction (yesterday better than today)

  • Happy with COHR developments (Silicon Carbide unit receiving a $1B investment, valuing COHR’s stake @ $3B)
  • Added more BRK-B today
  • FRO behaving well
  • VEEV doing well
  • STNG nibble on 10/10

10/15
Per the point made in the Q3 wrap-up thread, been thinking more on how to adjust and/or reposition the dividend basket for 2024. The 2023 basket does present an interesting dilemma where the basket meets the dividend target, but ends up negative. This is due to a couple of major whacks led to severe beatdowns. At this point, some realized losses (RA, PDT) and other unrealized (AY, IEP). AY is the odd one out - selling off despite holding its payout steady. (Some combination of AQN challenges & concerns on debt financing)

So, part of the thought process involves finding DRIP ideas that have both dividend AND growth possibilities. In some ways, a good candidate could be former basket member ZIM. An obvious problem is that ZIM has zero dividend, or at least, has not paid a dividend for the current fiscal year. A second candidate is GSL - share price has been whacked even though the company has kept its payout steady. Another obvious but dangerous one is FRO. I say dangerous because I think the current rise seems to be priced for improved results. If FRO miss on one of those expectations e.g. is the market expecting another 80c dividend in Q3? There’s also the increase debt for those 24 EURN VLCCs. Uh oh! All shipping ideas so far.

Then my perusal of the landscape brought another idea to the surface - Ardagh Metal Packaging (AMBP). Or a pick I no longer consider a shipping entity - Golar LNG (GLNG). Share price might get a bounce after the second FLNG vessel reaches its destination - offshore Mauritania/Senegal. Will still hunt for more, but 5 is a decent start.

Thru 10/20
Ugly week for the port, especially on the tech side - NVDA, ENPH, TSLA, GSM, VEEV
Transactions

  • AMBP nibble
  • ABEV nibble
  • TSLA nibble (Roth ac)
  • AEHR nibble (Roth ac)
  • GSM nibble
  • ZIM nibble
  • BRK-B nibble (Roth ac)
  • NVDA nibble (Roth ac)
  • AMBP nibble
  • ABEV nibble (Roth ac)
  • GSM nibble
  • Realized some FRGE gains - quite timely
  • GSL nibble

During the tech beat-down, tanker names have held up pretty nicely. Or seen a small bounce.

10/26

  • Revisiting the TRMD mistake. Added to TRMD in DRIP ac
  • More COHR on retreat below $30/sh
  • NVDA nibble in Roth ac
  • TRMD in reg IRA ac
  • More WU on price retreat (reported decent results)
  • Another FTCH nibble in taxable ac

Moves yesterday 10/25

  • More GSM in Roth ac
  • More NVDA in taxable ac

10/28
Since my DRIP basket thoughts from 2 weeks ago, a couple more ideas filtered in. One just released results, and slammed hard. Still trying to figure out why the market beat up Western Union (WU) so bad. The company beat both revenue and earnings expectations, and had revenue growth in some regions. In any case, I bumped up my WU stake. Won’t rush things, but WU could stay on the near-term radar for nibbles.

Picked up more GSL.

Added to “find” Ardagh (AMBP) and gained additional insight into the company along the way. Supposedly, it was a SPAC-funded entity, originally in Ball Corp. Company reported Q3 this past week. Capex spending to remain steady in 2023, then dip in 2024, and possibly onward. Growth in NA and Brazil offset decline in Europe. Can AMBP maintain the dividend while the price recovers? I’m not expecting the original SPAC levels, just something in the $4 - $5 level would be more than enough.

Did add ZIM - bounced, then gave it back. Mostly on the side-lines with dry bulk shippers. I think the way things are looking currently - avg results across the board for all the nibble plays - SB, DSX, GOGL, SBLK (the last two only in Roth ac currently). Wait for Q3 results or additional 5 - 10% pullback on any of the four. Bulker market seems to be sliding back down too.

10/30
Have not upped my SA membership to access their Quant ratings. But, a news item showed up in my emails-- regarding dividend names

Hmm! I own #1 and #2 as my primary bets on crude oil tankers (FRO) and refined products (TRMD). Of course, FRO is not pure-play crude oil anymore. But, then again, even in Oughts, the OBO vessels trading dry meant FRO has not been pure crude oil tankers.

In any case, seven additional ideas to consider (VST I am aware of via Oaktree Capital)

10/31
BNS: Trick or Treat?
I slashed my stake in BNS significantly - caused the idea to drop out of my Top 10 holdings. The logic - the last payout for 2023 has been paid, and this is a chance for me to get the loss show up in 2023 (already LT), so no major disadvantage if shares get washed. Allows me to rebuild the BNS position in early Dec, if that makes sense.

11/03
NMM reported Q3 results yesterday. Among the reported events was the adjustments to four container vessel charters. Earlier today, Maersk reported additional layoffs - to be completed in the next eight weeks. Cut my NMM stake by about 1/3

Nice 13+% IEP bounce today after reporting Q3 results.

Trimmed QCOM in Roth ac on bounce

Another FRGE nibble

11/08
Among three entities reporting today - GSM, NFE & FLNG
GSM - Nice numbers, initial bounce of 10%, but now pulled back
NFE - Various activities, but Fast LNG #1 delayed, 12% bounce - Took a short position
FLNG - Nice numbers, added 12.5c to div, bounce followed by pull-back; added to position

11/09

  • VEEV reported today - AAarggh! 13% price hit on slightly revised Q4. Wow! less than 5% revenue adjusted and overall less-than-favorable economic situation can cause that much value destruction?
  • VATE reported after-hours. Will have to parse
  • TRMD reported good numbers. Div looks relative good. Some fleet transactions. Have to parse later
  • GSL reported. Another to parse.
  • GOGL transaction from 10/31 closed out - small gain
  • Puzzled on the AY tear-down. I though the AY mgmt team did a decent job explaining how debt was manageable, how incremental growth was possible, and how AY could maintain the dividend
  • On price bounce, SBLK tidbit (Roth ac) from June 2023 has been monetized. The second buyback is a positive, but SBLK mgmt have added more uncertainty. More apt to trade this name prior to earnings.
  • Nibbled on INSW

11/10 & 11/13
After the clean-up of GOGL & SBLK, I felt good. So I considered other options. The “Mouse” i.e. DIS, came on the radar. Seems to be in this mostly down sloping channel, until the last month. So I added on 11/10, and sold the older shares today. Only Roth ac shares currently, so just need to trade in the one account.

Slightly different with GSM. Added initially in taxable ac. As shares trended lower, add to Roth ac. Results were last week, and I thought they were pretty decent under the circumstances. Expensive debt being paid down seems like a good plan.

Another Roth nibble for AMBP.

Taxable ac nibble on new idea UWMC

ESEA goes on my radar. Q3 2023 results were good. Seem to have a really good grasp on the container sector. While financing of the seven newbuilds might represent some risk, I do think ESEA do have several options available to them. IIRC, in years past, ESEA had a joint venture set up with a third party, with ESEA having their vessel mgmt skills as part of what they brought to the table. A second option - a preferred share issue to finance at least a couple of vessels. But, the most straightforward option is just to get a basic short => medium term deal, like the first two newbuilds. The downward market pressure might not provide $48K daily. But, even $30K daily for a couple of years might be helpful for the near term.

11/14
Lots of names in the port got a bounce - I took the opportunity to trim or exit some of my positions

  • RYAM bounce - closed out taxable ac stake (not all of the position was positive, so re-entry will have to consider wash implications)
  • NMM bounce - a little too early, but a clean-up was needed. Also with wash concerns
  • TSLA bounce - trim in Roth ac (gain)
  • TSLA bounce - trim in taxable ac (loss)
  • FRGE bounce - trim in taxable ac

Ideas taking a beating

  • SE took a 20% hit; seemed overdone. Restarted taxable ac position
  • NPWR - covering themselves in case of supply chain issues? Not sure, added to stake
  • Considered a CELH nibble on the drop. Paused

11/15
Two more holdings reporting today

  • DSX initially surprised me. Didn’t expect them to maintain the div, but then realized the div is paid in shares, unless cash requested. But, there was an additional pleasant surprise - their TCE was higher than SBLK even with a bunch of lower rates on Ultramax and Panamax vessels. Bounce was deserved.
  • ZIM reported. Took a major impairment. Mgmt focused on the new vessels - 13 of 46 delivered so far. Will have to skim the transcript again. But, holding onto cash, that’s a plus (for now)
  • FTCH bounced - trimmed the position (high priced shares). Will watch during the next week.
  • Don’t follow as closely. But nice Target (TGT) bounce today. I should consider TGT for DRIP ac
  • As INSW was selling off, decided to increase my position. Two nibbles, including one in the Roth ac.

11/16
As a follow up to some of the moves made yesterday, some similar moves today.

  • More INSW as it continued to retreat.
  • Trimmed high priced COHR shares (in Roth ac)
  • Monetized some QCOM
  • VEEV nibble (Roth ac)
  • Considered a CSCO nibble on the drop (don’t think it filled)
  • Another SE nibble (Roth ac)

Digested the ESEA Q3 transcript. Some interesting points

  • ESEA mgmt think market conditions will be challenging in 2024
  • Still not having discussions with liner companies on fixing newbuilds. Did suggest the likely offer would be $11K - $13K for the 1700-TEU, around $18K for the 2800-TEU presently. Vessels don’t deliver for 4 - 5 months.
  • Pittas family have around 50% stake in the company (did not realize it was that high)
  • Based on leverage, contract coverage, and finances, think the company is okay for the next 7 or 8 quarters
  • Good data. Though not chasing after ESEA here.

Skimmed the RYAM Q3 presentation. Seems like the company is doing a major review of its business with the potential to sell Paperboard and High-Yield Pulp segments. Don’t understand RYAM well enough to know how their segments fit together. That’s a negative on my part. Should treat RYAM along the same lines as ABEV i.e find a base price and a margin point. Then trade RYAM within the parameters. Some profit, some loss yesterday. But the bigger plus is recycled capital.

11/17
Saw a post on SA - poster regularly sifts through 13F filings of major investment manager. Had a review of Seth Klarman’s Baupost holdings. Mentioned because Klarman likes to hold lots of cash, and has a core holding (most recent filing has Top 5 that is 56.5% of investments) The current top 5

  1. LBTYK 17.42%
  2. LSXMK 11.24%
  3. VRTV 10.77%
  4. GOOG 9.69%
  5. FIS 7.38%
    Made me think of my own self-managed port. I would have to double my own Top 5 to get to a similar place. Been doing more of the opposite with top holding QCOM. FRO currently sits in 6th spot, and with slight adjustments (fewer trades), it could have taken 5th slot. Less of a woulda-coulda point, as the FRO stake has been entirely built in 2023. I guess, one other slight similarity - the Baupost stock holding lean toward media. Mine has generally had a two sector core - tech or shipping.

BROS nibble moved the pick into Top 10.

While both INSW & STNG have pulled back a little, the former seems more undervalued and appealing.

I didn’t know what business Veritiv (VRTV) is involved with, digging further … packaging. Baupost had a multi-bagger in a really boring sector. I guess, yet another similarity – my Ardagh (AMBP) pick is also involved in packaging - can I get a similar return? :wink: My initial target is lower.

After reading this week’s broker report, and skimming the Q3 results for both GNK and SB, am I being too hard on dry bulk shipping? Yes Q3 is normally the strong Q in the cycle. This year, that does not seem to be true. But unlike the container shipping sector, the outlook in dry bulk seems to be more promising. Potential nibble on one idea prior to results this coming week? Someone looks golden – GOGL Will have to see how share price starts out on 11/20

11/20

  • Nibbled on GOGL
  • Closed out BDRY in Roth ac
  • Trimmed NVDA in Roth ac
  • Trimmed RYAM in Roth ac
  • More INSW in taxable ac

11/21

  • Given the bulker market in Q3, decent GOGL results (& good timing on yesterday GOGL re-entry). Nice vessel trade in Oct 2023 - exercise option on vessel, then sell vessel $6M higher. Q4 2023 playing out better than Q3 2023, with two additional newbuilds
  • Realized loss on VFS in Roth ac. Prepared to re-enter (just not in taxable ac here).
  • Realized more NVDA gains (Roth ac)
  • GLNG also announced Q3 2023. FLNG Gimi on its way to GTA, but at this time, Commercial Operations Date (COD) is at least 6 months out.
  • TRMD trades ex-div on 11/21/23