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Primarily referring to the Houthi rebel attacks in the Red Sea pushing up shipping rates:
Https://masterinvestor.co.uk/equities/braemar-houthis-and-q1-team-internet-update/?mc_cid=75cbb0db86&mc_eid=db9f9bbaf2
Extracts:
"However, the ongoing stress created in re-routing shipping around the Cape has seen costs increasing for both the shipping companies and their customers.
That is when companies like Clarkson (LON:CKN) and Braemar (LON:BMS) become extremely important advisors and agents.
Volatility and uncertainty in shipping markets is usually positive for shipbrokers.
Clarkson stated at its AGM on Thursday of last week that it had made a positive start to the year, helping its clients to navigate the ongoing complexities and disruptions to global trade, by providing the expertise, data and insights to enable them to make the right decisions for their organisations.
For both groups their Forward Order Books must have seen some good uplift, the benefit from which will become evident in the second half of this year.
Rapidly rising freight rates suggest that fears of delayed goods have kicked off the peak season early this year.
Shippers fear major delays on goods due to new supply chain disruptions.
This has jump-started the peak season and sent spot rates soaring.
Elsewhere there are reports that the market for buying and selling second-hand dry bulk carriers is in the top 20% of the price development since 2000, while for tankers it is in the top 10%.
The past six months have seen significant price increases for used dry cargo ships and tankers.
However, I now really suggest that investors should keep their eyes on the shares of my favourite shipping services group."
"In the last few months, a couple of the group’s competitors have been acquiring stakes in the company – the Peter Dohle Group and Lightship Chartering, both declaring just over 3.0% holdings in the BMS equity.
The group should be announcing its 2024 results, which are not expected to see any surprises, before the end of this month.
At this stage expectations for the current year to end February 2025, are for £150.2m of revenues and £15.8m pre-tax profits, generating nearly 47p per share in earnings and easily covering an estimated 14.0p in dividend.
Last night the shares closed at 295p at which level they are trading on a miniscule 6.3 times prospective price-to-earnings ratio, while yielding a very healthy 4.7%.
I believe that they will soon be trading at levels far higher than on 8th January and I have confidence in my aim of early-May at 350p."
It looks like BMS will be promoted to the FTSE Small Cap Index in the next review on 29th May.
Which could provide some impetus for the next leg up if all goes well:
Http://www.stockchallenge.co.uk/ftse.php
OT : just noticed Clarkey1880's post below. Why he's having a go at me I don't know, since I'm merely re-posting the quote from Mark Watson-Wiliams at Master Investor. Takes all sorts I s'pose!
Rivaldo should change his name to ramper
Lightship Chartering, is 51.5% owned by Danish founder and chairman Morten Have. Sune Fladberg, the private company’s CEO, was reported as stating that:
“It’s quite simple, we believe strongly in shipping in the near future and are looking for opportunities to invest further in the industry. We think the valuation in Braemar is very attractive at the moment.”
In early January I assessed that Lightship must have paid up to 290p a share for its holding. Whereas Minna could have been paying around 250p to 275p a share for its position.
Last week the Braemar shares hit 284p before closing on Friday night at 277p, valuing the whole group at just £79m. The company’s results for the year to end February 2024 should be declared within the next three weeks or so.
In its 20th March issued Trading Update the group declared that it had achieved another strong performance, with revenue and underlying operating profit?for FY24 in line with market expectations – at £150m and £18m respectively.
However, impressively it announced that it had an Order Book of $83m, which was 47% ahead of the 2023 figure of $56m.
When asked ‘why invest in Braemar?’ the group responds:
“We are one of only two publicly traded shipbroking companies on the London Stock Exchange, offering an attractive opportunity to invest in the shipping industry without needing to invest directly in ships.
As a leading global shipbroker with offices in London, Singapore, Beijing, Geneva, Perth, Dubai, Athens, Hamburg, Melbourne, Madrid, Shanghai, and Houston, we’re well-positioned to serve key industry players across different time zones and cultures.
Our operations are diversified across Tankers, Dry Cargo, Sale & Purchase, Renewables, Financial and Offshore in order to generate a reliable, less cyclical income stream.”
Broker’s Estimates
Estimates for the current year to end February 2025 are for around £150m of revenues and £15.8m pre-tax profits, worth 46.6p per share in earnings and more than three times covering a 14.0p per share dividend. Analyst Price Objectives for the shares range from 385p to 505p, against Friday night’s closing 277p.
In late March I wrote that:
“The May figures could well see upgrades helping to pinpoint just how undervalued this group’s shares are at last night’s closing price of 256p.
I still find it hard to understand why these shares are so lowly valued, they are destined to rise above the 300p level fairly soon.”
The above estimates show that the shares of Braemar are an extremely attractive proposition, which is more than likely to be the reasoning behind two of its competitors buying into the group’s equity.
On 5.9 times current year prospective price-to-earnings ratio and yielding 5.05% – the shares are almost a giveaway, in fact, I now set a new Target Price for Braemar’s shares at 350p."
Another article on Master Investor - particularly useful info about the two new investors in BMS from the shipping sector:
Https://masterinvestor.co.uk/equities/who-are-the-two-competitors-buying-into-braemars-equity/
"Who Are The Two Competitors Buying Into Braemar’s Equity?
By Mark Watson-Mitchell 07 May 2024
It could prove to be excellent timing for the latest declared buyer of equity in my favourite shipping services group Braemar (LON:BMS). Later this week its larger competitor, the £1.23bn capitalised Clarkson (LON:CKN), will be holding its AGM, so we will, no doubt, get an update on life within the sector.
Second Shipping Sector Group Buys In
I noticed that another shipping services group has recently been putting together a declared stake in Braemar’s equity.
On Friday afternoon last week, it was declared that Minna Invest GmbH from Hamburg, Germany had put together a 992,398 shareholding in BMS. There is scant information available about Minna Invest to tell us immediately who is behind the stake.
However, I have found out that Jan Peter Döhle and Jost Döhle are the two Managing Directors of Minna Invest.
The Döhle Group covers all parts and aspects of the modern shipping business:
“We offer a wide range of services including financial, commercial, and technical support, as well as insurance and crew management. Apart from our complementary activities provided by the companies within the Group, our core competencies lie in chartering as well as sale and purchase. With its numerous offices, subsidiaries, and partner companies located worldwide Peter Döhle Group offers tailor-made solutions for the whole shipping industry.”
The Döhle Group controls the world’s largest tramp-owned fleet of containerships, comprising a total of around 415 highly modern vessels. The fleet ranges from small feeder vessels of around 300 TEU up to ships of 13,000 TEU capacity (a TEU is a 20ft long equivalent unit container). All the fleet’s ships fulfill today’s market requirements such as super-slow steaming and high reefer capacity. Many are equipped with their own cargo gear, making the fleet versatile as well as technically and commercially competitive in all areas of the world.
The Döhle group, which has more than $8bn assets under its management, offers a wide range of services: sale & purchase; technical management; crew management; insurance; commercial management; bunker trading; financial restructuring; corporate services; shipping software; and shipping agency & logistics.
That Now Makes Two Competitors Recently Into The Equity
Readers may well remember that on 10th January this year I noted that another player in the shipping sector had bought into the BMS equity. I revealed that an ambitious Geneva-based shipbroking company had been putting together a ‘major shareholding’ in the group’s equity.
Lightship SA had bought some 1m shares representing 3.04% of the issued stock.
Good to see another institutional shareholder buying and now declaring a major holding. Minna Invest GmbH now have 992,398 shares and 3.01% of BMS.
They don't appear as having over 2% on the latest market summaries, so they must have bought quite a few relatively recently:
Https://uk.marketscreener.com/quote/stock/BRAEMAR-PLC-4001661/company/
Featured on Master Investor:
Https://masterinvestor.co.uk/equities/small-cap-catch-up-bms-ztf-cury-and-more/
"Braemar (LON:BMS) – Looking Totally Undervalued
Yesterday morning’s Trading Update for the year to end February 2024 declared that the shipping services group had achieved a strong year in line with market expectations.
Revenue is expected to be not less than £150m (£153m) with underlying operating profit of not less than £18m (£20m).
That really was quite a year that its management must surely hope was now well out of the way.
The £73m capitalised group kept a positive cash position with net cash at 29th February 2024 of £1m (£7m), which was a decrease from the prior year after the cost of the internal independent investigation conducted and concluded last year, certain tax payments and share buy backs during the period.
As for this new year the company has informed investors that its total forward order book is some 47% up at $83m, which is a good advance from the $65.6m book as at end October last year.
With its finals due to be announced in May it is worth reminding readers that analyst Ian McInally at Cavendish Capital Markets has previously estimated that the current year revenues could rise to £154.4m, with adjusted EBIT of £18.2m, worth 36.5p in earnings and enabling a 14.9p dividend per share.
Come the May figures we could well see upgrades helping to pinpoint just how undervalued this group’s shares are at last night’s closing price of 256p.
I still find it hard to understand why these shares are so lowly valued, they are destined to rise above the 300p level fairly soon."
Edison have a new note out - they have a 500p price target.
They forecast 45.4p EPS for the year just finished, with 46.4p EPS this year.
That's backed up with a 13p dividend, rising to 14p this year:
Https://d3s3shtvds09gm.cloudfront.net/c06876e7564a986049fdc15f35be0f12.pdf
"Outlook encouraging with c 100% valuation upside
The outlook is encouraging, evidenced by the underlying global trade situation (the
IMF raised global GDP growth estimates by 0.2% to 3.1% in February) and the forward order book, which was up 47% to US$83m, driven primarily by activity in the Sale and Purchase division. FY24 results are expected to be released by the end of May.
We have maintained our estimates for FY24 and FY25 but edged down our FY24 dividend expectations from 13.5p to 13.0p, which implies a modest reduction in our previous valuation of 520p to 500p per share, based on our dividend discount model"
Today's nicely in line year end update suggests the recent drop has made BMS excellent value.
We can expect EPS of somewhere between Cavendish's 38p EPS and Edison's 45.4p EPS.
Accompanied by a 13p dividend, lifted by 8%.
Most importantly, the order book is up a whopping 47% to $83m, suggesting that the current year is looking very good.
Maybe this week?
Based on prior years
Https://masterinvestor.co.uk/equities/alumasc-shearwater-and-more-all-on-the-move/?mc_cid=0e7846951e&mc_eid=db9f9bbaf2
"Braemar (LON:BMS) – Competitor Buying Into The Equity
With the re-routing of trade routes around the Cape of Good Hope, the global shipping market is now reacting to container freight rates rising for the last six weeks in a row, getting back up to the higher levels of October 2022.
It was quite a beneficial share price move on Monday, following the revelation that an ambitious Geneva-based shipbroking company has been putting together a ‘major shareholding’ in the group’s equity.
The new holding notification to the market states that Lightship SA has bought some 1m shares representing 3.04%.
That is said to be good news for players in the shipping sector, including shipbroker Lightship Chartering, which is 51.5% owned by Danish founder and chairman Morten Have.
Sune Fladberg, the private company’s CEO is reported as stating that:
“It’s quite simple, we believe strongly in shipping in the near future and are looking for opportunities to invest further in the industry.
We think the valuation in Braemar is very attractive at the moment.”
I reckon that the Lightship stake was purchased at around the 290p level, so at last night’s close of 300p, it is already showing its holding is well in the ‘swim’.
After hitting 310.60p on Monday morning, further price rises to trade well into, the 300p to 350p range can be expected within the next few months."
Per FT Alphaville the cost of container shipping worldwide is up more than 60 per cent this week, and sailing around Africa is adding 10 days to containerships’ journeys. All this has to be good news for BMS?
Https://www.ft.com/content/0dda1cb4-0400-447e-a260-97d90cbfa41d
And as regards the possible closure of the Suez/Panama Canals:
"A closure of these key thoroughfares would boost container demand by 1.5% and 7% respectively. For tankers and bulkers, the closure of the Suez Canal would add roughly 30% to transit distances and boost fleet demand between 1-2%, according to their estimates. Longer supply lines tie up more vessels, boost freight rates, widen origin-destination spreads, and lift bunker demand. Furthermore, a worsening supply chain may be bullish goods demand as companies over-order to ensure adequate inventories. "
Lightship SA have just declared a 3.04% shareholding in BMS with 1m shares:
Https://uk.advfn.com/stock-market/london/braemar-BMS/share-news/Braemar-PLC-Holdings-in-Company/92934010
What's intriguing is that presumably this is connected to Lightship Chartering, "one of the world's leading bulk carrier brokers":
Https://www.lightshipchartering.com/
A strategic move, something trade or partnership-related, or simply a share in a cheap investment?
In 2020 Lightship lost an entire broking team to BMS:
Https://shippingwatch.com/Services/article12337618.ece
Edison research 45.4p EPS this year absurd 6x pe
https://www.edisongroup.com/research/interims-in-line-growth-strategy-developing/33028/
Up the spout in the Suez. Good for BMS!
Bms should be 400p! Cavendish research 38p earnings forecast this year
newly tipped here too fyi (subscription only):
https://*************.com/views/72003/braemar-a-recovery-buy
"braemar – a recovery buy?...
by hotstockrockets | friday 15 december 2023
shares in company describing itself as “a leading provider of expert investment, chartering and risk management advice to the shipping and energy markets”, braemar (bms) had recovered to above 300p as recently as june this year and reached 340p last year, before in july this year the shares were suspended on an investigation of a historical transaction. they though returned from suspension last month and we suggest now have further recovery potential from a 280p offer price.
etc"
Https://aimcompounders.substack.com/p/braemar-plc-setting-sail-to-sweeter
Braemar CEO, James Gundy, CFO, Grant Foley and COO, Tris Simmonds present results for Full Year 2023 and H1 2024, followed by Q&A.
Watch the video here: https://www.piworld.co.uk/company-videos/braemar-bms-fy23-h1-24-results-presentation-december-23/
Or listen to the podcast here: https://piworld.podbean.com/e/braemar-bms-fy23-h1-24-results-presentation-december-23/
Nice summary on Master Investor overnight:
Https://masterinvestor.co.uk/equities/small-cap-catch-up-maritime-winners-and-luxury-flicks/?mc_cid=c746a43100&mc_eid=db9f9bbaf2
Yes, but, in order for BMS to scale in the timeframe desired, the only route is acquisition. Organic will take too long. They should be raising a bond to to aggressive scale growth. Do they have the current management capability to do that? i'm not sure
I understand you Clarkey but trust me I know this industry. Braemar is 1/4 size of Clarkson btw and Clarkson is not even a third of the global pie
CKN good. But look, the pie is worth X. Clarkson have 60pc the pie, braemar maybe 20pc. Hyperthetical. For braemar to become clarkson as u suggest, they will need to either acquire the other percentages (people or firms, people take time, firms quicker but more expensive) or do it organically, which is really tough to take liquidity from a leading firm.
BMS SHOULD leverage up, issue a bond and buy up the market - a classic michael spencer move. Will they tho? No. And why? Because the management is rubbish.
So, keep clarkson, keep braemar but understand that for braemar to be clarkson as you suggested (without diversification from its core business) clarkson will have to lose market share to bms - which is highly UNLIKELY
I own clarkson and I have for years so I know how this industry works. CKN has been a great hold. I am one of the few posters on CKN. I really like the prospects of both