Aug 14, 2012, 10:50am EDT
WL Ross & Co., the investment firm headed by Palm Beach billionaire Wilbur Ross Jr., agreed to buy shipping firm Navigator Holdings out of bankruptcy.
The New York-based firm struck a deal with Lehman Brothers to purchase 4.4 million shares of the company for $110 million. WL Ross already had 3.5 million shares of Navigator so the new deal would give it more than 50 percent ownership.
With offices in New York and London, Navigator has 14 gas carriers and delivers mostly to developing countries.
“We see substantial opportunities in the global transportation industry, particularly rail and marine transport,” Ross stated in a news release. “Navigator is a leader in the handy-sized shipping segment, which has excellent fundamentals and a positive long-term outlook as global shifts in demand for liquified petroleum gas and other petrochemicals increase opportunities for efficient, flexible marine transportation providers.”
Forbes ranked Ross the 206th wealthiest person in the U.S. with a net worth of $2.2 billion as of March.
Other WL Ross investments include a substantial stake in Miami Lakes-based BankUnited (NYSE: BKU).
Palm Beach billionaire Wilbur Ross acquires shipping company out of bankruptcy
- Brian Bandell
- Senior Reporter- South Florida Business Journal
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The New York-based firm struck a deal with Lehman Brothers to purchase 4.4 million shares of the company for $110 million. WL Ross already had 3.5 million shares of Navigator so the new deal would give it more than 50 percent ownership.
With offices in New York and London, Navigator has 14 gas carriers and delivers mostly to developing countries.
“We see substantial opportunities in the global transportation industry, particularly rail and marine transport,” Ross stated in a news release. “Navigator is a leader in the handy-sized shipping segment, which has excellent fundamentals and a positive long-term outlook as global shifts in demand for liquified petroleum gas and other petrochemicals increase opportunities for efficient, flexible marine transportation providers.”
Forbes ranked Ross the 206th wealthiest person in the U.S. with a net worth of $2.2 billion as of March.
Other WL Ross investments include a substantial stake in Miami Lakes-based BankUnited (NYSE: BKU).
The Sector That Billionaire Investor Wilbur Ross Is Most Optimistic About
Billionaire investor Wilbur Ross earlier this month once again suggested that the shipping industry is ripe for investment, presenting a handful of good stocks to buy now.
Ross knows how to spot a beaten-down sector and turn its brightest opportunities into mega-profits. This “vulture investor” previously invested in troubled sectors like coal, steel, and auto parts and cashed out years later with enormous gains.
This time, appearing on CNBC, Ross said that shipping companies were the next growth story.
In fact, earlier this year Ross told Bloomberg TV that he plans to invest as much as $2.5 billion in the shipping sector.
Here’s why Ross is looking for good stocks to buy now in this beleaguered industry.
Why These Shipping Names Make Good Stocks to Buy Now
By all accounts the global shipping industry has been distressed for several years now.
Overcapacity has been a serious problem since 2007 when a record level of capacity was added – just before the economy collapsed. Ross pointed out that shipping companies over-ordered new vessels prior to the global economic slowdown and rates plummeted along with vessel prices.
Cumulative losses in the industry have run to more than $7 billion in the past four years, according to industry analysts.
Container ships carry 90% of global trade and need an economic recovery for boom times to return. As we have seen that is taking longer to develop than most had hoped.
But the overcapacity has led to older, less fuel-efficient ships being scrapped. That’s why Ross said the lease rates are nearing a bottom – the extra storage space is being eliminated.
Pricing has fallen by 80%, but Ross said the market will now begin to stabilize and start growing again in 2014.
Commerzbank analysts recently told investors that, like Ross, they expect business to stabilize at today’s weak levels before improving in the second half of 2014.
Ross is raising $500 million for a private equity fund to find good stocks to buy now in shipping. He already has a controlling stake in Navigator Holdings Ltd., a major shipping concern.
Good Stocks to Buy Now as Shipping Recovers
As the economy works toward recovery over the next couple years, shipping stocks appear to offer an extraordinary opportunity. Most of the publicly traded shipping stocks trade at very low valuation based on total assets and earnings potential.
But as the industry turns around, these stocks could easily become market leaders and trade at two to three times their current share price.
Here are a couple stocks to buy now if you want to scoop up low-priced shares of a recovering sector. They have yields exceeding 5% and one-year price targets around 20% higher than their current share price.
Tsakos Energy Navigation Ltd. (NYSE: TNP) remains a favorite of many as a way to invest in the global economic recovery in general and shipping specifically. The company owns a fleet of 48 vessels that transport crude oil and petroleum products around the globe. The company has an average of 3.2 years per vessel of forward employment, which is expected to generate more than $1 billion in revenue.
Tsakos uses fixed medium to longer term contracts with profit-sharing arrangements that customers often find favorable and are able to maintain a high utilization rate as a result.
The company also has an investment in one of the few current growth situations in shipping: the transportation of liquefied natural gas.
The shares currently trade at just 20% of their tangible book value in the current depressed market. In 2007, the stock traded at a premium to tangible book and reached price levels ten times the current quotation. If they recovered half that much it would represent an enormous gain for investors willing to buy in a tough market.
The stock currently yields more than 5% so you get paid to wait for a recovery.
International Shipholding Corp. (NYSE: ISH) is a U.S.-based shipping company that will also benefit from the recovery. The company has both international and domestic vessels that are protected under the Jones Act for U.S. port-to-port shipping, which means they are built, owned, operated and manned by U.S. citizens. The company also operates bulk shipping as well as pure auto and truck carriers and container ships.
In total, ISH has a fleet of 46 vessels serving niche markets. Unlike most shippers, International Shipholding has a continual strong of annual profits over the past decade.
It also pays a generous dividend with the shares currently yielding 5.58%.
The stock trades at one-half of tangible book value and less than one-half the five-year high stock price. A recovery in the economy should see the stock price reward patient investors handsomely.
If Ross is as right about shipping as he has been about other industries in the past, these are good stocks to buy now before the recovery takes hold.
–Tim Melvin
WILBUR ROSS GOING TO INVEST AS MUCH AS $2.5BN IN SHIPPING STOCKS WHEN HIS NET WORTH IS ALSO NEAR $2.5BN?????OH MY GOD!IS IT A SHOWHAND??
Ross knows how to spot a beaten-down sector and turn its brightest opportunities into mega-profits. This “vulture investor” previously invested in troubled sectors like coal, steel, and auto parts and cashed out years later with enormous gains.
In fact, earlier this year Ross told Bloomberg TV that he plans to invest as much as $2.5 billion in the shipping sector.
Here’s why Ross is looking for good stocks to buy now in this beleaguered industry.
Why These Shipping Names Make Good Stocks to Buy Now
By all accounts the global shipping industry has been distressed for several years now.
Overcapacity has been a serious problem since 2007 when a record level of capacity was added – just before the economy collapsed. Ross pointed out that shipping companies over-ordered new vessels prior to the global economic slowdown and rates plummeted along with vessel prices.
Cumulative losses in the industry have run to more than $7 billion in the past four years, according to industry analysts.
Container ships carry 90% of global trade and need an economic recovery for boom times to return. As we have seen that is taking longer to develop than most had hoped.
But the overcapacity has led to older, less fuel-efficient ships being scrapped. That’s why Ross said the lease rates are nearing a bottom – the extra storage space is being eliminated.
Pricing has fallen by 80%, but Ross said the market will now begin to stabilize and start growing again in 2014.
Commerzbank analysts recently told investors that, like Ross, they expect business to stabilize at today’s weak levels before improving in the second half of 2014.
Ross is raising $500 million for a private equity fund to find good stocks to buy now in shipping. He already has a controlling stake in Navigator Holdings Ltd., a major shipping concern.
Good Stocks to Buy Now as Shipping Recovers
As the economy works toward recovery over the next couple years, shipping stocks appear to offer an extraordinary opportunity. Most of the publicly traded shipping stocks trade at very low valuation based on total assets and earnings potential.
But as the industry turns around, these stocks could easily become market leaders and trade at two to three times their current share price.
Here are a couple stocks to buy now if you want to scoop up low-priced shares of a recovering sector. They have yields exceeding 5% and one-year price targets around 20% higher than their current share price.
Tsakos Energy Navigation Ltd. (NYSE: TNP) remains a favorite of many as a way to invest in the global economic recovery in general and shipping specifically. The company owns a fleet of 48 vessels that transport crude oil and petroleum products around the globe. The company has an average of 3.2 years per vessel of forward employment, which is expected to generate more than $1 billion in revenue.
Tsakos uses fixed medium to longer term contracts with profit-sharing arrangements that customers often find favorable and are able to maintain a high utilization rate as a result.
The company also has an investment in one of the few current growth situations in shipping: the transportation of liquefied natural gas.
The shares currently trade at just 20% of their tangible book value in the current depressed market. In 2007, the stock traded at a premium to tangible book and reached price levels ten times the current quotation. If they recovered half that much it would represent an enormous gain for investors willing to buy in a tough market.
The stock currently yields more than 5% so you get paid to wait for a recovery.
International Shipholding Corp. (NYSE: ISH) is a U.S.-based shipping company that will also benefit from the recovery. The company has both international and domestic vessels that are protected under the Jones Act for U.S. port-to-port shipping, which means they are built, owned, operated and manned by U.S. citizens. The company also operates bulk shipping as well as pure auto and truck carriers and container ships.
In total, ISH has a fleet of 46 vessels serving niche markets. Unlike most shippers, International Shipholding has a continual strong of annual profits over the past decade.
It also pays a generous dividend with the shares currently yielding 5.58%.
The stock trades at one-half of tangible book value and less than one-half the five-year high stock price. A recovery in the economy should see the stock price reward patient investors handsomely.
If Ross is as right about shipping as he has been about other industries in the past, these are good stocks to buy now before the recovery takes hold.
–Tim Melvin
WILBUR ROSS GOING TO INVEST AS MUCH AS $2.5BN IN SHIPPING STOCKS WHEN HIS NET WORTH IS ALSO NEAR $2.5BN?????OH MY GOD!IS IT A SHOWHAND??
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