Ja, very dissapointing. I will start offloading to reduce my exposure. I can't sit with underperforming stocks - when my capital could be better allocated elsewhere. GND is a good company, in a bad situation. To me, what has become a bit disappointing, is that management at GND have not exactly been forthcoming on the ongoing challenges they are facing. They have been singing the praise of their contract cover - and have been continually going on about the expected growth in the shipping market - but htey are sitting with a huge ship order book , that will significantly increase their capacity next year - I can only hope that demand is sufficient to actually fill those ships.
How is it that not 6 months ago Standard Bank came out with a much more comprehensive research report recommending a buy at 18.70. Now it recommends a sell at 14. If their research is fundamentally based and it doesnt seem that the fundamentals have changed all that much in 6 months(besides for a drop in the BDI)this all leaves me a bit confused.
different analyst, different evaluation technique. Also, the last set of results (published after first report) are not pretty. I have dumped my stock - a reluctant decision- which I may regret later, but I can't be overweight on an underperforming stock, no matter how good I think the fundamentals are.
I hear your point and although the results were worse than expected, if you looked at the figures it was almost solely due to the forex charge. All I'm saying is that without serious fundamental changes all they have done is fiddled around with the PE ratios and voila- the company has lost half its value. I'm no expert analyst but this seems a bit shallow to me.
Nah Mark, the operating margins on their shipping business have come under immense pressure, which is not just a reflection of forex losses. I was evaluating GND previously on the quality of their freight business, but the EBITDA increases published are as a result of some accounting trick which I don't understand, while their top line took a big knock. A punt on GND now, is a punt on a) rand weakening substantially, and b) shipping rates increasing, and I am not comfortable on either of those two scenarios in the short term. The two need to happen in tandem - because the quality of the company earnings is not carrying them anymore. Maybe GND will make for a good long term play, but it is significantly underperforming the market right now, and was dragging down my portfolio too much.
I am not doubting for one second the tough trading conditions, specifically due to the current supply surplus. That's clear from the drastic drop in ROE over the past two years. However I'm merely looking at the earnings suprise, which wasnt that great, and saying what change warrants an almost 50% drop in valuation?. Anyways I think this is still a good long term play so I probably wont be selling out anytime soon.
@mark18, where do you see a "sell" at 14 from std ? the current consensus on this site is still "buy", at current levels of 13.23 the shipping market in general is under pressure at the moment. bunker prices have been increasing to high levels, not all
Don't think it has hit bottom yet. Wait till it bounces along in the trough and start feeding. This chap is going to bounce back sooner or later. Although my current holdings are in the minus,no way I am selling but instead will also soon be accumulating. Check out BCX as well. Similar situation, price has stabilised this past week. Time to start nibbling perhaps.
See analyst report dated 23 May 2011. They "initiate coverage"(dont know what thats supposed to mean- maybe something like "hope you forgot what we said six months ago, we changing our mind..) with a sell recomendation at 14.18 with a target price of 13.30.
really massive volumes traded today - GND just flagged on my trading system, so might take out a CFD position here. As for long term, I a tired of having this stock dragging down my portfolio. Lost my patience.