Friday, April 20, 2007

Hit #162 (OMI)

Tanker operator OMI Corp (OMM) is being acquired by Teekay Shipping and Danish tanker operator TORM, who plan to split up the assets. The $2 billion cash deal turns out to be a $29.25/share offer, translating to a gain of 89.1% over my average cost of $15.47/share.

I had mentioned my position in OMM when CP Ships (Hit #59) was acquired. The other open position mentioned in that post was in Dry Ships (DRYS) whose shares have more than doubled since then.

At this point, it is hard to find a cheap shipping stock. The ones that seem cheap, like Double Hull Tankers (DHT) and Aries Maritime Transport (RAMS) are not quality buys. If I had to buy something in this sector now, I would go after the larger players, even though they are not takeover targets - these are operators like General Maritime (GMR), Frontline (FRO), Overseas Shipholding Group (OSG), Nordic American Tanker (NAT) and Ship Finance (SFL).

Seaspan (SSW), also mentioned in that earlier post, is a quality long-term buy, even after the sharp runup in recent months. Other shippers - Eagle Bulk Shipping (EGLE), Diana Shipping (DSX) and Genco Shipping (GNK) - all listed in the post on Maritrans (Hit #116) takeover are expensive now. Quintana Maritime (QMAR) may be the only one worth opening a position in, but I have some more research to do there.

Previous hit - Cutter & Buck (#161)


Post a Comment

<< Home