Shipping Sector Boosts Jack A. Bass Managed Accounts

Headed by our position in Safe Bulkers and Dryships  the sector is responding to the slow realization that world economic growth – China in particular allows for rising rates. The bottom is in and we are taking advantage. of the trend . This will be years of recovery – and of solid profits.

SAFE BULKERS INC(SB:NYSE, US)

BuySell
6.93USDIncrease0.21(3.12%)Volume:
Above Average
As of 04 Sep 2013 at 11:45 AM EDT.

QUOTE DETAILS

Open 6.68 P/E Ratio (TTM) 5.6x
Last Bid/Size 6.92 / 2 EPS (TTM) 1.21
Last Ask/Size 6.93 / 2 Next Earnings 11 Nov 2013
Previous Close 6.72 Beta 1.97
Volume 199,459 Quarterly Dividend 0.0500
Average Volume 441,854 Dividend Yield 2.89%
Day High 6.94 Ex-Dividend Date 29 Aug 2013
Day Low 6.67 Shares Outstanding 76.7M
52 Week High 6.95 # of Floating Shares 30.20121M
52 Week Low 3.12 Short Interest as % of Float 2.14%
chart

DRYSHIPS INC(DRYS:NASDAQ, US)

BuySell
2.55USDIncrease0.22(9.44%)Volume:
Average
As of 04 Sep 2013 at 12:42 PM EDT.

QUOTE DETAILS

Open 2.33 P/E Ratio (TTM)
Last Bid/Size 2.54 / 232 EPS (TTM) -0.83
Last Ask/Size 2.55 / 232 Next Earnings
Previous Close 2.33 Beta 3.10
Volume 7,196,274 Last Dividend
Average Volume 13,346,413 Dividend Yield 0.00%
Day High 2.55 Ex-Dividend Date
Day Low 2.32 Shares Outstanding 403.8M
52 Week High 2.74 # of Floating Shares 347.1371M
52 Week Low 1.46 Short Interest as % of Float 1.55%
chart

Jack A. Bass Managed Funds Adds More SB

The original purchase made earlier this month at $5.83 has been added to in two small steps. this confirms our faith in the recovery of the shipping sector.

Monthly distribution of 1 % is not effected on the purchase of any one stock.

SAFE BULKERS INC(SB:NYSE, US)

Buy
6.85USDIncrease0.25(3.79%)Volume:
Above Average
As of 27 Aug 2013 at 3:55 PM EDT.

QUOTE DETAILS

Open 6.84 P/E Ratio (TTM) 5.2x
Last Bid/Size 6.85 / 3 EPS (TTM) 1.21
Last Ask/Size 6.88 / 37 Next Earnings 11 Nov 2013
Previous Close 6.60 Beta 2.15
Volume 838,121 Quarterly Dividend 0.0500
Average Volume 368,085 Dividend Yield 2.92%
Day High 6.88 Ex-Dividend Date 29 Aug 2013
Day Low 6.60 Shares Outstanding 76.7M
52 Week High 6.88 # of Floating Shares 30.20121M
52 Week Low 3.12 Short Interest as % of Float 2.14%

 

Safe Bulkers Raises Returns On Jack A. Bass Managed Accounts

The Justice Society Returns

The Justice Society Returns (Photo credit: Wikipedia)

1 % monthly payouts are not effected by this rise in (any) particular holding.

SAFE BULKERS INC(SB:NYSE, US)

 

6.12USDIncrease0.35(6.07%)Volume:
Above Average
As of 22 Aug 2013 at 12:46 PM

ATHENS, GREECE — (Marketwired) — 08/21/13 — Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three- and six-months period ended June 30, 2013. The Company’s Board of Directors also declared a quarterly dividend of $0.05 per share of common stock for the second quarter of 2013.

Summary of Second Quarter 2013 Results

  • Net revenue for the second quarter of 2013 decreased by 12% to $41.4 million from$47.0 million during the same period in 2012.
  • Net income for the second quarter of 2013 increased by 14% to $24.6 million from $21.5 million, during the same period in 2012. Adjusted net income(1) for the second quarter of 2013 decreased by 36% to $15.1 million from $23.7 million, during the same period in 2012.
  • EBITDA(2) for the second quarter of 2013 increased by 14% to $36.1 million from $31.6 million during the same period in 2012. Adjusted EBITDA(1) for the second quarter of 2013 decreased by 21% to $26.6 million from $33.7 million during the same period in 2012.
  • Earnings per share (“EPS”) and Adjusted EPS(1) for the second quarter of 2013 of $0.32and $0.19 respectively, calculated on a weighted average number of shares of 76,679,328, compared to $0.28 and $0.31 in the second quarter 2012, calculated on a weighted average number of shares of 76,653,848.
  • The Company’s Board of Directors declared a dividend of $0.05 per share of common stock for the second quarter of 2013.

AMP Hedge Fund Bragging Rights TRADING ALERT FRO

Frontline Ltd.

Frontline Ltd. (Photo credit: Wikipedia)

FRO  Frontline – part of the call for a shipping sector revival – see July 19th and prior articles .

This morning :

FRONTLINE LTD(FRO:NYSE, US)

BuySell
2.84USDIncrease0.47(19.83%)Volume:
Above Average
As of 24 Jul 2013 at 11:39 AM EDT.

 

QUOTE DETAILS

Open 2.46 P/E Ratio (TTM)
Last Bid/Size 2.83 / 12 EPS (TTM) -1.39
Last Ask/Size 2.84 / 6 Next Earnings 30 Aug 2013
Previous Close 2.37 Beta 1.86
Volume 2,671,664 Last Dividend
Average Volume 1,140,572 Dividend Yield 0.00%
Day High 2.98 Ex-Dividend Date
Day Low 2.46 Shares Outstanding 77.9M
52 Week High 4.50 # of Floating Shares 47.85264M
52 Week Low 1.71 Short Interest as % of Float 20.90%

DEUTSCHE BANK: These Are The Best Stocks You Can Buy Right Now

CBS

CBS

Ticker: CBS

Target Price: $55

Net Debt/Mkt Cap: +18%

’13 EPS Growth: +20%

America’s number 1-ranked network has enjoyed a major recovery since its 2009 lows, and recently overtook Yahoo! at #130 in the S&P 500 ordered by market capitalization.

REUTERS/Lucas Jackson

Ticker: VIAB

Target Price: $70

Net Debt/Mkt Cap: +26%

’13 EPS Growth: +14%

Viacom recently penned a deal with Amazon worth hundreds of millions of dollars, allowing the internet company to stream Viacom shows.

 

DEUTSCHE BANK: These Are The 33 Best Stocks You Can Buy Right Now

STEVEN PERLBERG JUL. 2, 2013, 12:36 PM 60,090 2
  • 3/34

Ralph Lauren

Mikhail Metzel/ AP

Ticker: RL

Target Price: $190

Net Debt/Mkt Cap: -7%

’13 EPS Growth: +7%

Ralph Lauren have been on a tear this year, and shareholders are scheduled for a dividend of $0.40 per share on July 12th.

 

DEUTSCHE BANK: These Are The 33 Best Stocks You Can Buy Right Now

STEVEN PERLBERG JUL. 2, 2013, 12:36 PM 60,090 2
 Share
  • 4/34

VF Corp

Ticker: VFC

Target Price: $215

Net Debt/Mkt Cap: +11%

’13 EPS Growth: +13%

VF, the apparel giant that owns The North Face, established a revenue target of $17.3 billion by 2017 at a recent investor meeting.

LyondellBasell Industries

REUTERS/Donna Carson

Ticker: LYB

Target Price: $75

Net Debt/Mkt Cap: +2%

’13 EPS Growth: +16%

LyondellBasell Industries, a multinational chemicals company based out of Houston, reported its last quarterly earnings as $1.56 per share, beating consensus estimates of $1.45.

 

Baker Hughes

AP

Ticker: BHI

Target Price: $59

Net Debt/Mkt Cap: +19%

’13 EPS Growth: +6%

Baker Hughes, one of the world’s largest oilfield service companies, stands to benefit from energy growth in the Gulf of Mexico.

Bank of Montreal

This BMO branch in Waterloo, Ontario retains t...

This BMO branch in Waterloo, Ontario retains the Molsons Bank name on the plinth. (Photo credit: Wikipedia)

BMO : TSX : C$62.50
BMO : NYSE
HOLD 
Target: C$69.00

COMPANY DESCRIPTION:
With more than $525 billion in assets, Bank of Montreal, together with its subsidiaries, provides a broad range of retail banking, wealth management and investment banking products and solutions in North America and internationally. BMO operates approximately 1,600 bank branches and employs approximately 46,000 full time employees globally.
All amounts in C$ unless otherwise noted.

WEAK QUARTER: MARGINS AND EXPENSES
BMO reported Q2/13 adjusted EPS of $1.46, below our estimate and consensus of $1.49. EPS was up 1% YoY. Excluding the $66 million after tax recovery on the impaired credit portfolio acquired from M&I, EPS would have been $1.36. Relative to our estimate, stronger capital markets revenues were offset by lower insurance results, higher expenses, and a higher tax rate.
The Basel III CET ratio increased to 9.7% from 9.4%, reflecting earnings in the quarter and model refinements which lowered RWA. The bank bought back 4 million shares in the quarter. We believe BMO’s strong Tier 1 ratio and weaker earnings growth supports building in more aggressive share repurchase activity for 2013 and 2014. Insofar as capital allocation is concerned, we believe BMO is leaning more toward buy backs than acquisitions.

U.S. P&C earnings were up 9% YoY reflecting lower PCLs and expenses offset by weak top line growth (loan growth offset by NIM pressure). The 3% YoY decline in expenses reflects M&I synergies. On a US$ basis, total loans were up 0.4% QoQ (the second consecutive quarter of growth) as commercial loans were up 1.9 % QoQ and personal loans were down 1.2%. We expect synergies and good commercial loan growth (offset by NIM pressure) to drive mid- to- high-single-digit earnings growth.
Domestic P&C earnings were down 0.7% YoY, reflecting -2.3% operating leverage and additional NIM pressure. Expense growth was elevated, but consistent with commentary regarding the desire to continue to invest in the franchise. BMO’s issue with operating leverage does not appear to be expense control but rather the very weak top line growth. We do not believe revenue growth will accelerate in the near term largely because we expect margins to remain under pressure.

We continue to believe that BMO’s more aggressive posture in mortgages, while leading to strong mortgage growth this quarter (discussed below) is hurting the bank’s margin. Our 12-month target price of C$69.00 (down from C$70.00) is based on the stock trading at 10.8x our 2013E EPS, a 6% discount to the group multiple of 11.5x. We continue to rate BMO a HOLD. Our outlook on the stock is constrained by an expectation of below group average EPS growth driven by: a) higher PCLs as recoveries decline, b) NIM pressure, and c) weak operating leverage in domestic retail. We also expect BMO’s dividend growth to lag its peers.

Bank of Nova Scotia

Scotia Tower, as seen from Seymour Street.

Scotia Tower, as seen from Seymour Street. (Photo credit: Wikipedia)

BNS : TSX : C$59.61
BNS : NYSE
BUY 
Target: C$67.00

COMPANY DESCRIPTION:
Scotiabank is one of North America’s premier financial institutions, and Canada’s most international bank. With over 80,000 employees, Scotiabank Group and its affiliates serve over 19 million customers in more than 55 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking.

Q2/13 core cash EPS was $1.24 (up 6% YoY) versus our estimate of $1.25 and consensus of $1.26. At 6% YoY, BNS’ earnings growth is likely to be in line with the group average. Relative to our estimate, revenue was higher than expected, with capital markets revenue coming in better than expected. Slightly weaker than expected results relates to higher PCLs and higher expenses.
International earnings were up 5% YoY, reflecting good revenue growth offset by higher than expected investment spending and a 34% YoY increase in PCLs. Noninterest expense growth was 11% (5% QoQ), with half of the increase relating to acquisitions and the other half to investment spending. Operating leverage in the quarter was nil.

Given the investment spending in 2012, we expected BNS to deliver 2-3% operating leverage in the segment in 2013. In this respect, the expense growth in the quarter was surprisingly high. Higher PCLs reflect the expected normalization of credit losses in Colombia. We expect International
earnings growth to return to the low double-digits as early as next quarter.
Domestic P&C earnings were up 18.7% YoY on 15.1% YoY revenue growth and operating leverage of 2.4%. YoY, we were looking for earnings growth of 16.8%, revenue growth of 13.1%, and operating leverage of 1.1%. Earnings growth, excluding ING Direct, would have been 7.6%. Only Royal Bank is expected to deliver better organic earnings growth this quarter. With ING contributing $45 million in earnings last quarter and $51 million in Q2/13, the bank is already at the $190 million run rate discussed at the time of the deal.
Over the last five years, the bank’s better earnings stability and momentum has earned Scotia an average premium of 5-7%. On our estimates, the stock currently trades at a 5% premium to the group. For the reasons outlined below, we set our target price on BNS based on the stock trading at a 6% premium (consistent with RY).

Our target P/E premium drives a target P/E of 12.2x applied against our 2014E EPS and a target price of C$67.00 (down from C$69.00).

National Bank of Canada

English: The National Bank of Canada tower in ...

English: The National Bank of Canada tower in Place d’Armes (Photo credit: Wikipedia)

NA : TSX : C$77.02
BUY 
Target: C$89.00

COMPANY DESCRIPTION:
National Bank of Canada is an integrated group that provides comprehensive financial services in its core market in the province of Quebec.
National Bank offers a full array of banking services, including retail, corporate and investment banking. National Bank has over $176 billion in assets and employs over 19,000 employees.

UPGRADING TO BUY ON RELATIVE VALUATION AND IMPROVED OUTLOOK ON CAPITAL

NA reported core Q2/13 EPS of $2.08 (up 6% YoY), above our estimate and consensus of $1.97. Relative to our estimate, stronger capital markets related revenue (trading particularly) was partially offset by higher PCLs and noninterest expenses. NA raised the dividend as expected.
NA’s BIII CET ratio increased to 8.3% up from 7.9%, reflecting earnings, including the $100 million ABCP gain. The bank announced a 2% ($250
million) NCIB this quarter. We model for quarterly repurchases of 600,000 shares to arrive at a total share repurchase of 2.5 million shares, slightly under the 3.25 million authorized. With our assumed share repurchases, the bank’s Basel III CET ratio continues to improve, climbing from 8.3% this quarter to 8.7% by the end of 2014.

After deducting 30 bps for the CVA adjustment in 2014, the ratio should remain well above 8%.
P&C earnings were up 1% YoY on operating leverage of 0.7% offset by higher PCLs. P&C net interest income was weak, increasing only 1.6%, reflecting 10% volume growth offset by lower NIM YoY. NIM of 2.30% was down 13 bps from last year but was down only 1 bps QoQ. After delivering very weak NIM performance in domestic retail throughout most of the year, National’s QoQ P&C NIM performance (down 1 bps) was solid.
Our target price increases to C$89.00 from C$88.00 (target discount unchanged at 10%). At 20%, upside potential to our target price is as high as
other BUY-rated stocks. While we acknowledge that the current quarter’s results were largely driven by higher CMRR and that P&C remains weak,
given the bank’s discount valuation and our revised outlook on NA’s capital outlook, we are upgrading NA to BUY from Hold.

Our typical pattern with NA is to upgrade the stock when the discount to the group is well ahead of 10% (currently 13%) and downgrade once the discount narrows materially. In this  context, as well as the fact that the earnings beat was not particularly high quality, we view our upgrade as a short term call.

Pernix Therapeutics

Therapy Session 4

Therapy Session 4 (Photo credit: Colorblind Seb)

PTX : NYSE MKT : US$6.26
BUY 
Target: US$14.00 

COMPANY DESCRIPTION:
Pernix Therapeutics Holdings is a specialty pharmaceutical company that develops and manufactures generic and branded prescription and OTC
products, with particular emphasis on pediatrics. PTX is focused in the areas of allergy, upper respiratory, antibiotics and dermatology. PTX is headquartered in The Woodlands, TX.

Pernix announced that it has completed the acquisition of Somaxon Pharmaceuticals (key branded product Silenor for insomnia). The deal adds a nice low-risk, on-market branded product that PTX will give its sales force to reinvigorate sales (similar to Cedax), with also hopes of OTC potential down the road.

With the deal now closed, we would expect management to turn its attention back to more business development opportunities, which should continue to drive P&L upside. We should get more color here in two weeks (March 18), when PTX reports Q4 earnings.

Reiterate BUY rating and $14 target.
Model update – we forecast $0.11 accretion on our 2013 EPS We have updated our model for the closing of the Somaxon deal – we estimate ~$0.11 of accretion on 2013E EPS (and beyond). PTX gave preliminary guidance of $10-15 million in revenue add and $5-10 million in EBITDA for the first year post closing. We have also increased shares outstanding, which did end up near the high end of possible outcomes (3.665 million) given the lower stock price. Our new EPS estimates from 2013-2016 are now $0.39, $0.69, $1.06 and $1.61. That said, PTX is reporting Q4 EPS on Monday, March 18 (two weeks) where we would expect a fuller update around business trends and a chance to revisit our model and assumptions.
Valuation
Our $14 price target is derived from an equal-weighted ~20.5x P/E and ~7.5x EV/EBITDA multiple applied to our 2014 forecasts. PTX currently
trades at 9.1x P/E on our 2014 forecasts.

Bank of Nova Scotia

English: View of a ScotiaBank facade in Amhers...

English: View of a ScotiaBank facade in Amherst, Nova Scotia. This structure was erected in 1907. (Photo credit: Wikipedia)

BNS : TSX : C$61.32
BNS : NYSE
BUY 
Target: C$69.00

COMPANY DESCRIPTION:
Scotiabank is one of North America’s premier financial institutions, and Canada’s most international bank. With over 80,000 employees, Scotiabank Group and its affiliates serve over 19 million customers in more than 55 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking.

Q1/13 core cash EPS was $1.27 (up 12% YoY) versus our estimate and consensus of $1.25. Revenue growth was better than expected, and PCLs came in lower than forecasted. The bank raised the quarterly dividend to $0.60 (5% QoQ and 9% YoY), higher than our estimate of $0.59.
International earnings were up 12% YoY, reflecting very strong operating leverage. Expense growth checked back to 15.5% YoY (0% QoQ) from the very high levels seen in 2012 (21% in full year 2012), resulting in operating leverage of 5.5%. Management indicated that the YoY increase in expenses largely related to acquisitions.

While we do not expect the bank to deliver mid-single-digit operating leverage in International, given the investment spending in 2012, we
do expect BNS to deliver 2-3% operating leverage in the segment in 2013. Importantly, commercial loan growth recovered after two consecutive quarters of disappointing QoQ growth.
Domestic P&C earnings were up 21% YoY on 13.3% YoY revenue growth and operating leverage of 1.2% (expense growth of 12.1% YoY). We were looking for earnings growth of 19%. Better than expected results relate to the ING Direct deal which added $45 million to earnings versus our estimate of $35-40 million. As Scotia functions with a significant funding gap in Canada, to the extent that the bank uses the lower cost retail deposits from ING to replace wholesale funding, the bank can quickly improve funding costs. At $45 million in earnings in the quarter, the bank is already near the $190 million run rate discussed at the time of the deal.
Over the last five years, the bank’s better earnings stability and momentum has earned Scotia an average premium of 5-7%. On our estimates, the stock currently trades at a 6% premium to the group. For the reasons outlined below, we set our target price on BNS based on the stock trading at a 7% premium (versus RY at a 6% premium). Our target P/E premium drives a target P/E of 12.3x applied against our 2014E EPS and a target price of C$69.00 (up from C$67.00).

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