Overseas Shipholding Group (OSG)

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[edit] I am a fan of oil tanker companies and I think this write up give a pret...

Suggestion by Tim Plaehn on 2008-01-08 13:56:34

I am a fan of oil tanker companies and I think this write up give a pretty good overview of OSG. I did notice a discrepency in the first couple of paragraphs on the number of ships the company has. I would like to see and explanation of the difference. Also, shipping companys can employ their vessels either on the spot market or longer term fixed rate charters. They either own their ships (may be financed) or lease them. The different terminology needs to be made clear, and the pros & cons could be discussed. The tanker business can be a fast moving bogey in regards to rates and profits. Using the WikiCharts to keep readers updated would be helpful. When I read up on a new (to me) company here, I go to the WikiCharts first, then bull and bear arguments, then the main writeup. I look for support between the 4 pages.

Add comments or discussion related to this suggestion here.

[edit] Intro

I think that you intro is fairly strong. You should, however, be careful to keep your audience in mind. Remember, that this will more than likely be read by people who while intelligent may have no previous experience with the energy transport industry. Given this, try to use as little jargon as possible and provide explain the jargon when you do use it. For instance, you mention that their "tankers are primarily sold in spot markets in commercial pools." What does this mean? What are spot markets? What do you mean by sold? Be careful with your word choice.

I'm not sure that I understand your meaning that investing in OSG is a bet that oil prices will fall. Given that they transport petroleum products, it seems that they do well when both oil prices and oil supply are high. Also I would rephrase this to make it sound more neutral. Oil prices is one factor that affects the company. Explain what the relationship is between the company and oil, but try not sound opinionated. Instead mention that the growth of worldwide oil demand is robust, driven in part by emerging countries like China and India. Supply seems to grow along side demand albeit at a slower pace. On the other hand tanker supply is set to increase dramatically in the next few years. This could lead to excess capacity which could depress shipping rates.

[edit] Overview

I would just explain what international product tankers are.

I think that its great that you linked to the site on the Jones act. That said when the person lands on that page, he or she does not immediately come across a functioning definition of what the Jones act is. Instead of linking to the site, I would link to a definition page that has a brief description of what the Jones act is. Then under the description add something to the affect of "for more information please refer to," and link to the site.

Also you gloss over the diversification of the fleet. Instead I would mention specific acquisitions that have led to that diversification.

What kind of risk is posed by acquiring/chartering new vessels?

[edit] Trends and Forces

In general, I would say that this needs a little more substance.

Oil demand: Link to the oil prices concept

Value of tankers: Expand on this. Don't just through out bunch of things that affect tanker value. Choose 2-3 and explain how they could impact the company

Tanker supply: There is a significant amount of new supply coming on the market. This could drive down prices for transport. If you can find some publicly available to support this that would be great.

Renewable energy: Flesh this out a bit. Give some facts or metrics to support. There is plenty of info on the site. Make sure you link to the renewable energy article.

Taxes:

Why do they not pay that much in taxes now. Do they not pay taxes on their foreign operations. What is their affective tax rate (can be found in 10-K) Be explicit.

[edit] Footnotes

Footnotes are crucial, because they allow readers to validate information. You should footnote all graphs and charts. You should also footnote, key metrics(e.g. oil demand growth, revenue numbers, key percentages). You should only include metrics that are found in publicly available sources so that they can be verified by anyone reading the article. When citing a 10-K make sure you include the year covered, the section, and page number. Take a look at the RL article for examples of footnotes.

[edit] Linking

Links are a critical part of the wiki experience. They are provide a valuable way for us to surface additional content on other companies and concepts while allowing readers to navigate the site more easily. That said, link!link!link!. You should link to other concepts from this article. you should also go to the article pages to which you have linked and add links back to this article.

Competition:

Add a one two sentence description of each company. Identify one metric that is company in the industry and compare the companies along this metric. One idea might be tons shipped in 2006 or utilization rate.

[edit] Reply

Tim -

the difference in fleet number is due to the fact that I wanted to compare all of OSG's competitors fleets using info from their 10-ks last year, whereas in the opening section I wanted to give (what was at the time) an up to date number.