I agree NOL is not that correlated to BDI. Look out instead for Chinese PMI (purchasing managers index), Shanghai Containerized Freight Index (SCFI), cost of bunker fuel, etc.
I dont believe a CEO with almost zero experience( formerly an army general) in shipping is able to steer a large company in a highly competitive and tough industry.
Shipping companies need to ride through the volatility of shipping circles which are rather feast and famine type in nature.
NOL records are seriously forgettable. I know shipping is in the doldrums, but if you look at other overseas carriers, most big companies are still making profits in the last 5 years. I am not talking about giants like Maersk or the likes, but surprising, when I am researching on YZJ customers, rickemers, seaspan, and even golden ocean are making good profits.
Says a lot about NOL management when they need to sell their "home" and lease it back to raise cash...
Discussing about the business here, I have no idea if the price will rise or fall in the short term, I am terribly bad at trading, you might make good money trading on the momentum of the BDI and better than expected trade figures from China
and WOW, Baltic Dry Index rises , to 1,478 points , up 126 Monday, 09 September 2013
NOL 31 Oct 2013: From NOL's Q3 report, the company has turnaround. Q3 net profit of US$23 million include a US$31.8 million of FX gain, but nevertheless, the performance come with tough cost control at all levels.
YTD nine months reflect a profit of US$64 million, but include US$205 million gain on sale of NOL Building.
Expected full year EPS should be within the range of US$0.035 to US$0.04 a share.
However, its balance sheet need to strengthen in the coming years. As at Sep 2013, total debt came up to US$4.5 billion, total equity at US$2.2 billion, and cash balance at US$856 million.
That will give NOL a net gearing of 165%, and NOL must take step to reduce that high gearing.
US$446 million of debts need to be repaid within a year.
Beside cash calls, NOL may have to divest assets and/or businesses to pare down its debt.
Its current gearing of 2.1 times may improve over time, but certainly will not be so soon.