Courage Marine was one of the stocks that I actively traded during the boom time of 2007 and 2008. My last purchase price for Courage Marine was 44 cents which coincides with the peak of the Baltic Dry Index. Since then, the stock had dropped by more than 50%. Price as of 31 Jul 09 is 23.5 cents. Even so, I attribute this to my error of trying to time the market and got myself burn. I am still holding onto this stock, as it has a sound business model and good management despite being in a volatile industry.
A general background of the company
Courage Marine deals in the marine transportation industry. It is a dry bulk carrier group which owns and operates 8 dry bulk carriers that transport raw materials for Asia's growing needs. Its fleet is deployed around Greater China, Japan, Russia, Vietnam, Indonesia, Blangadesh and elsewhere in Asia.
The vessels transport mainly dry bulk commodities such as coal, gravel, cement, cement clinker, iron ore and various minerals. One can observe that these are the basic materials required for development and is closely related to the global economic state. The fleet that company has contains, Handsize, Handymax and Panamax vessels.
Competitive Strengths of the company
In basic terms, these groups of vessels belong to the smaller class size as compared to large ones called the Capesize. The advantages of owning a smaller group size of fleet means that it gives the management more flexibility in optimising the transportation requirements to ensure full optimization of the available Deadweight Ton. In layman terms, the company ensure that every time the ship set sail, it will be loaded with the max tonnage so as to maximise the ship capacity. This is extrememly important given the volatility of the industry. It is very important to stay lean and flexible without comprising on the optimal deployment of the Group's fleet capacity.
Externally, the group has extensive presence in the Asia region meaning that it will be able to tap on to the economic boom for this promising and developing region. The group will be well placed to meet increases in the existing customers and potential new customers transportation requirements.
Internally, the group has a strong operating cash flow and a net cash position providing opportunities for the company to acquire vessels for its expansion plans.
The company comprises of a strong management team that has beening running the company in a efficiently and this is clearly the case as the company has been listed as one of the World's Top 10 Shipping company for the 3rd year in a row. This recognition reaffirms the group position as a strong and consistent performance among the world's 100 shipping firms. It also shows credibility towards the Group's asset light business model that is built on diligent cost management and prudent expansion policy.
Key downside risks
Path to economic recovery will be the key factor determining how fast the company can come out of the wood. Referring to my previous post on the dry bulk industry, one will be able to know what are the main factors affecting the valuation of companies in this industry.
Why am I still holding onto this stock?
One, it has a proven track record. Though it posted a net loss in the 1Q09, when one look at the Financial Year since the company was incepted, it has never made a loss and despite the economic downturn that plague the global economy, the company has continued to issue dividends, creating shareholder value.
Secondly, its accolades speak volume of this company. So right now, I will continue to accumulate shares of this company using the dollar cost averaging method. I hope this sleeping monster will awake soon.
A general background of the company
Courage Marine deals in the marine transportation industry. It is a dry bulk carrier group which owns and operates 8 dry bulk carriers that transport raw materials for Asia's growing needs. Its fleet is deployed around Greater China, Japan, Russia, Vietnam, Indonesia, Blangadesh and elsewhere in Asia.
The vessels transport mainly dry bulk commodities such as coal, gravel, cement, cement clinker, iron ore and various minerals. One can observe that these are the basic materials required for development and is closely related to the global economic state. The fleet that company has contains, Handsize, Handymax and Panamax vessels.
Competitive Strengths of the company
In basic terms, these groups of vessels belong to the smaller class size as compared to large ones called the Capesize. The advantages of owning a smaller group size of fleet means that it gives the management more flexibility in optimising the transportation requirements to ensure full optimization of the available Deadweight Ton. In layman terms, the company ensure that every time the ship set sail, it will be loaded with the max tonnage so as to maximise the ship capacity. This is extrememly important given the volatility of the industry. It is very important to stay lean and flexible without comprising on the optimal deployment of the Group's fleet capacity.
Externally, the group has extensive presence in the Asia region meaning that it will be able to tap on to the economic boom for this promising and developing region. The group will be well placed to meet increases in the existing customers and potential new customers transportation requirements.
Internally, the group has a strong operating cash flow and a net cash position providing opportunities for the company to acquire vessels for its expansion plans.
The company comprises of a strong management team that has beening running the company in a efficiently and this is clearly the case as the company has been listed as one of the World's Top 10 Shipping company for the 3rd year in a row. This recognition reaffirms the group position as a strong and consistent performance among the world's 100 shipping firms. It also shows credibility towards the Group's asset light business model that is built on diligent cost management and prudent expansion policy.
Key downside risks
Path to economic recovery will be the key factor determining how fast the company can come out of the wood. Referring to my previous post on the dry bulk industry, one will be able to know what are the main factors affecting the valuation of companies in this industry.
Why am I still holding onto this stock?
One, it has a proven track record. Though it posted a net loss in the 1Q09, when one look at the Financial Year since the company was incepted, it has never made a loss and despite the economic downturn that plague the global economy, the company has continued to issue dividends, creating shareholder value.
Secondly, its accolades speak volume of this company. So right now, I will continue to accumulate shares of this company using the dollar cost averaging method. I hope this sleeping monster will awake soon.
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