Nov 6, 2007
Air Industries (AIRI.OB) announced another long-term agreement with Sikorsky, valued at $15M. “This brings the total value of all contracts from Sikorsky announced this year to over $75 million,” said Peter Rettaliata, CEO. “Through both organic initiatives and acquisitions, we expect continued growth in all facets of Air Industries Group.” Last quarter, Retalliata spoke of “a return to profitability in the second half of the year.” While I think that was a reference to the fourth quarter, the company nonetheless offers a compelling risk-reward setup ahead of earnings. Barring any catastrophes, it should see no more than a few cents to the downside, while a strong report could break it out of the $.26-$.32 range it has (for the most part) traded in over the past year.
Western Goldfields (WGDFF.OB) hit new highs along with gold itself today after announcing that it is moving from the OTC BB to the Amex. Shares are expected to begin trading on the Amex on Thursday, November 8, 2007, under the symbol “WGW”. Until then, it will continue to trade under the symbol WGDFF.OB on the OTC Bulletin Board. The move is an incremental positive for a stock that already has a lot of promise.
Paragon Technologies [[PTG]] announced a $2.9 million order, adding to its considerable backlog. Remember, Paragon has an enterprise value under $10 million. I expect that these recent orders will soon begin to drop to the bottom line.
Advocat Inc. [[AVCA]] announced third quarter earnings of $.32 per share after hours, and has authorized a repurchase of up to $25 million in common stock. Could lift shares tomorrow.
The Baltic Dry Index still looks like it is beginning to turn south. To nobody’s surprise, the dry bulk shippers continue to drop precipitously (short EXM).
DISCLOSURE: Long AIRI.OB, short EXM. No position in other stocks mentioned.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Oct 30, 2007
On October 19th, I wrote that the long rally in dry bulk shippers was likely to end. I was a few days early, but today it did just that. On RealMoney.com, Tony Crescenzi explains why: “there is a lot of chatter today about a decline in shipping rates. Panamax rates are said lower and mid-size dry bulk tanker rates are said to be sharply lower compared to the previous quote. The Baltic Dry Shipping Index will likely reflect this chatter when new data are available.”
Shares of Excel Maritime [[EXM]], of which I am short, dropped 20% today:
DryShips, another dry bulk shipper, dropped 17.5%:
My experience is that such violent moves at the end of a long rally usually signal substantially more weakness to come. Also, the expected Chinese efforts to improve air quality by slowing factory production in the months just ahead of the Olympics should also weigh on the dry bulk shippers.
DISCLOSURE: Short EXM. No position in DRYS.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Oct 19, 2007
I have been a fan of the dry shippers in general, and Excel Maritime [[EXM]] in particular, for almost two years. As the Baltic Dry Index of spot prices doubled and doubled again, the dry shippers started to print money, and their shares shot up. Excel Maritime, for example, surged from around 11 when I first bought shares, to over 77 today (unfortunately I did not remain long through the entire rally).
A reversal appears imminent, but has not yet been confirmed. On this particularly ugly day in the markets, dry shippers lost more than most. Excel Maritime lost more than 5%, DryShips [[DRYS]] lost nearly 9%. What to watch: The recent spike in most of the dry shippers began shortly after the Baltic Dry Index crossed its 20-day average, and I will consider the trend finished when that average is broken to the downside (see chart below, courtesy of InvestmentTools.com).
On this weakness, I opened a small short position in EXM, which I will close if the Baltic Dry Index or EXM hit new highs.
DISCLOSURE: Short EXM. No position in DRYS, GNK, EGLE.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
Feb 2, 2007
When I first profiled dry shipper Excel Maritime (EXM) (articles), I said that I would keep the trade on so long as the trend remained in both EXM stock and the Baltic Dry Index of freight rates. EXM is still trending, but it looks like the Baltic Dry Index is turning down. That was my signal to take profits. I am now out of the dry shippers. Perhaps the move was a bit early, but dry freight rates are quite volatile and can plummet in a heartbeat.
If the index turns up again, I’ll take another look. Thanks to InvestmentTools.com for the excellent chart.
DISCLOSURE: I have no position in EXM. Not a recommendation to buy or sell any security. For informational and educational purposes only.
Like this? Subscribe to RSS | Comment | Bookmark on del.icio.us
