GRINDROD SHIPPING HLGS: AN UNDERVALUED DRY BULK GEM. Grindrod Shipping Holdings (GRIN) is a South African dry bulk operator listed in both the Johannesburg Stock Exchange (JSE) and in NASDAQ. They operate a fleet of 15 owned handysize, 9 owned supramaxes/ultramaxes and 7 more in long term TCs. Five of their chartered-in supramaxes have purchase options attached.
Frankly, I have 0 experience with shipping investments. Couple of questions / comments:
- Why wouldn't management focus on sweeping away the debt with FCF? They already paid back over $80m in H1. Deleveraging alone should make this quite interesting, no?
- With regards to capital allocation, I would understand if they would focus on share buybacks if they think the Co is clearly undervalued, but the size of the buybacks is not necessarily impressive. What's your take on this?
- What do you think is the market missing and what is in your view triggering a rerating? Simply Q3 / Q4 reporting?
Also, do you have any recommendation for a publicly available primer / "shipping for dummies"? Would be neat to understand the fundamentals of this business.
Congratulations, a first class job. Having invested 3% of my portfolio in Grinrod myself, your analysis gives me confidence that I am on the right path to success and encourages me to increase my position in the $14-15 range.
Hi Alex, super interesting, many thanks.
Frankly, I have 0 experience with shipping investments. Couple of questions / comments:
- Why wouldn't management focus on sweeping away the debt with FCF? They already paid back over $80m in H1. Deleveraging alone should make this quite interesting, no?
- With regards to capital allocation, I would understand if they would focus on share buybacks if they think the Co is clearly undervalued, but the size of the buybacks is not necessarily impressive. What's your take on this?
- What do you think is the market missing and what is in your view triggering a rerating? Simply Q3 / Q4 reporting?
Also, do you have any recommendation for a publicly available primer / "shipping for dummies"? Would be neat to understand the fundamentals of this business.
Cheers
Congratulations, a first class job. Having invested 3% of my portfolio in Grinrod myself, your analysis gives me confidence that I am on the right path to success and encourages me to increase my position in the $14-15 range.
Thank You so much.