One Global Sector Where Greece Beats Germany -- And Is A Big Investor Opportunity
Germany may be giving Greece a lot of economic lessons these days. But there is one global sector where Germany can take a lesson or two from Greece: merchant shipping, where Greece
occupies the second world ranking, well ahead of Germany.
That’s the old news. The new news is that the gap between Greece and Germany widened
recently with
the acquisition of 24 German vessels by Greek companies.
Now for the big
investor opportunity. Greek merchant shipping companies listed in US exchanges trade at bargain prices.
Costamare CMRE -0.2%, for instance, trades at around 10 times next year’s earnings, Navios Maritime Partners (NYSE:NMM), close to 15 times next year’s earnings, and Tsakos Energy Navigation (NYSE:TNP) around 7 times next year’s earnings.
I particularly like Costamare Inc. (NYSE:CMRE) — one of the world’s leading owners and providers of containerships for charter.
The Company has
40 years of history in the international shipping industry and a fleet of 67 containerships, with a total capacity in excess of 438,000 TEU, including 11 newbuild containerships on order. Twelve of their containerships, including nine newbuilds, have been acquired pursuant to the Framework Agreement with York Capital
Management, by vessel-owning joint venture entities in which they hold a minority equity interest.
What makes Costamare an appealing investment are two things: First, its strong financials that make it stand out among its peers — large operating margins, a healthy revenue and profit growth, and a hefty dividend of 6.7%.
Second, their reliance on long-term leases rather than on spot rates—the company signs long-term shipping leases as soon as new vessels are ordered.
Last year, for instance, the company ordered nine newbuilds with capacities between 9,000 and 14,000 TEU pursuant to their joint venture agreement with York Capital Management (“York). The newbuilds are scheduled to be delivered between the 4th quarter of 2015 and the third quarter of 2016.
The Company holds an equity interest ranging between 25% and 49% in each of the relevant vessel-owning entities. Long term time charters have been agreed on for the five 14,000 TEU capacity newbuilds with members of the Evergreen Group (“Evergreen”), which represent total contracted revenue for the joint venture of $850 million, assuming exercise of the owner’s options.
This week, the company
reported first-quarter earnings of $26.3 million or 38 cents per share, beating the 31 cents per share analysts expected—not bad given the sluggish economic environment for the merchant shipping industry.
That’s why I’ll stay with the company
ecco perchè la Grecia non deve andare out of cash, come disse la Merkel...