Can someone smarter than me (broad audience activated!) please look into ZIM and explain it to me like I am 5 yrs old?
Shipping.
Cyclical…we had big covid/commerce boom. That could be going away for a bit. I get that.
Dividend seems nutso. But when dividend is paid out, the stock price drops by the monster amount. Huh? So after a few more years, won’t it have to be a penny stock practically?
They also seem to be different than typical shipping co’s due to niche focus, investment in shipping-related tech, leasing instead of owning…not sure???
Don’t know if this is a great hidden opp, might make a couple bucks, or be a mammoth waste of time.
Revenues doubled while cost of goods sold (actual $'s, not %) remained constant. SG&A constant. Profits doubled, tripled. Capital investments remained same. Pay dividend.
Windfall.
Best site that I know of regarding ocean freight is Value Hounds, although it is somewhat abandoned. Go back a year and there are threads on various shipping companies. Baltic Dry Index sort of thing, leasing ships, new builds, ships-for-scrap.
Anyway, since (except for LNG fueled new builds which probably are financed) there isn’t much investment in capacity, and since these stocks sell on small premium to book value, when the windfall cash is distributed as dividend, the book value goes down and the stock price follows. If freight rates stay high, the balance sheet balloons, pay dividend. When do freight rates “normalize”?
I wouldn’t be surprised to see layoffs or hiring freezes start increasing after the Q3 earning announcements especially as most companies are going through 2023 budget cycles.