Euroseas (ESEA)

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See all Bulls Reasons Bulls: Reasons To Buy Trading at a discount 100% agree Trading at a discount With ESEA trading at a 50% discount to peers on a price/earnings basis, it would seem there is a significant amount of value locked up in the shares at this time. Wachovia estimates that a purchase of any 15-year-old handymax container ship would add $0.10 per year to earnings.... read more View or Edit Reason 1 votes 100% agree Bears: Reasons To Sell Feeling Bearish? Be the first to explain why this would make a poor investment Send the authors a comment or suggestion Be the first to make a suggestion See All Suggestions

Top Contributors Zach Scheidt

• DryShips (DRYS)
• Baltic Dry Index (BDI)

Euroseas (ESEA) has a unique approach in that it buys ships that are older than most companies’ fleets and relies on its expertise to maintain and operate each vessel.

[edit] Business

Euroseas is a relatively small player in the industry with 5 dry bulk ships, 9 container ships and 1 multi-purpose vessel. The company has been growing its fleet at a steady rate by adopting a disciplined approach to acquiring vessels. After issuing additional stock last year, the company has over $105 million in cash to spend as well as an additional $100 million in available credit.

Management has stated a willingness to leverage its portfolio up to 50% which could lead to purchases of up to $400 million. Since issuing the additional stock, management has inspected 10 ships as potential targets but has yet to make an announcement about a purchase of any one of these vessels.

[edit] Trends and Forces

[edit] Increase in scrap value

With scrap values for retired ships continuing to climb, it would seem that the strategy is likely to pay off as long as management does a good job forecasting the useful life of each purchase, and maintains each vessel at a cost effective level. Once it becomes too cost intensive to operate a fully aged ship, the company should be able to sell the vessel to a scrap company who will likely pay top dollar for the steel and other materials.^[1]

 Euroseas

	Select All  |  Select None Metrics Average Age of Fleet Average Time Charter Equivalent per Day Earnings Capacity Days Net Earning Days Off-Hire Days Average Vessel Operating Expenses per Day Time Charter Equivalent Revenues Vessels Owned Vessels Chartered In Debt to Equity Average Number of Vessels Revenue Net Income Number of Vessels Percentage Utilization Deadweight Tons Cancel

	Select All  |  Select None Companies American Commercial Lines (ACLI) Alexander & Baldwin (ALEX) Arlington Tankers (ATB) B+H Ocean Carriers (BHO) Capital Product Partners L.P. (CPLP) Danaos (DAC) Double Hull Tankers (DHT) DryShips (DRYS) Diana Shipping (DSX) Eagle Bulk Shipping (EGLE) Euroseas (ESEA) Excel Maritime Carriers (EXM) FreeSeas (FREE) Frontline (FRO) StealthGas (GASS) Golar LNG (GLNG) General Maritime (GMR) Genco Shipping (GNK) Hornbeck Offshore Services (HOS) Horizon Lines (HRZ) International Shipholding (ISH) Kirby (KEX) K-Sea Transportation Partners LP (KSP) Nordic American Tanker Shipping (NAT) Navios Maritime Holdings (NM) OceanFreight (OCNF) Omega Navigation Enterprises (ONAV) Overseas Shipholding Group (OSG) Quintana Maritime (QMAR) Aries Maritime Transport (RAMS) Rand Logistics (RLOG) Ship Finance International (SFL) Seaspan (SSW) TBS International (TBSI) Tidewater (TDW) Teekay Lng Partners, L.P. (TGP) Teekay Shipping (TK) Grupo TMM, S.A. (TMM) Tsakos Energy Navigation (TNP) Teekay Offshore Partners L.P. (TOO) Trailer Bridge (TRBR) Aktieselskabet Dampskibsselskabet Torm (TRMD) Ultrapetrol (Bahamas) (ULTR) U.S. Shipping Partners L.P. (USS) Knightsbridge Tankers (VLCCF) BRISTOW GROUP (BRS) PHI (PHII) Firstgroup PLC (FGP-LN) Cancel

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Company	Data From	Revenue	Net Income	Number of Vessels	Percentage Utilization	Deadweight Tons
DryShips (DRYS)	2006	$248M	$56.7M	36	97.7%	3M
Euroseas (ESEA)	2006	$42.1M	$20.1M	10	98.9%	345K
Horizon Lines (HRZ)	2007	$1.21B	$28.9M	21	Add	Add
StealthGas (GASS)	2006	$73.3M	$18.5M	28	98.9%	Add
Ultrapetrol (Bahamas) (ULTR)	2007	$222M	$4.44M	8	Add	733K

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[edit] References

1. ↑ http://zachstocks.com/2008/04/euroseas-ltd-esea-old-ships-bring-new-profit/
2. ↑ ^{2.0 2.1 2.2} 2006 DRYS, 20-F, Item 3, Page 2
3. ↑ ^{3.0 3.1} 2006 DRYS, 20-F, Item 4, Page 20
4. ↑ ^{4.0 4.1 4.2} 2006 ESEA, 20-f, Item 3, Page 2
5. ↑ ^{5.0 5.1} 2006 ESEA, 20-f, Item 4, Page 22
6. ↑ ^{6.0 6.1} 2007 HRZ, 10-K, Item 6, Page 30
7. ↑ 2007 HRZ, 10-K, Item 1, Page 7
8. ↑ ^{8.0 8.1} GASS - 20-F of 2006, Item 3 pg 2
9. ↑ GASS - 20-F of 2006, Item 4 pg 20-21 & F-6
10. ↑ GASS - 20-F of 2006, Item 3 pg 3
11. ↑ ^{11.0 11.1} ULTR - 10-K of 2007,Item 3 pg 5
12. ↑ ^{12.0 12.1} ULTR - 10-K of 2007,Item 4 pg 32