Globus Maritime (GLBS) reported Q4 earnings yesterday. And
it was quite a revelation to me. Their
operating loss was to be $2.8 mil.
However, they took a $80 mil write down of top of the small loss!
I bought this stock a year ago because its book value was more than 5x
its market cap. Now, with one stroke of a pen, it is less than 3x.
GLBS is a small shipping company. The company owns only 7 bulk ships. As with
all shipping companies recently, the company's earnings
were hit hard by the global glut of ships. The report says
they expect the situation to persist until 2014. But the company
has $10 mil of current assets. So cash flow is not a problem in
the short term while management waits for the end of the shipping glut.
However, all this makes me realize that shipping is a hard, competitive
business. Something that all veterans of the business know.
While companies like GLBS are trying to wait out the downturn,
others like Diana Shipping are using this opportunity to buy
ships on the cheap.
For me, this is a lesson learned. GLBS may actually be cheap right now.
I really don't know. But I know shipping investments are risky and
they aren't for me, like airlines aren't for Buffett.
And so, as a result, I have sold out my GLBS position, at a 10% loss.
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