Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) has been beaten up badly over the last couple years, along with the rest of the Drybulk shipping space. But, with India, China, and the US all starting to fire up plans for some form of infrastructure-based stimulus agenda, the shippers may be starting to turn around. SHIP, with its small float and recent efforts to rebuild its fleet, may be a very interesting stock right now.
As most traders know by now, the drybulk shippers can be some of the most volatile stocks in the market. These guys are as cyclical as it gets, turning with shifts in demand for heavy materials often found at the heart of major construction projects in need of flat rolled steel, copper, iron ore, lumber. While they also transport things like grains or food stuffs as well, those tend to be less cyclical. So, it’s the heavy industrial commodity transportation that often defines the trend for these stocks. For those not familiar with SHIP, in particular, we should take a moment and cover the company’s recent history for some extra perspective.
Seanergy Maritime Holdings Corp. (NASDAQ: SHIP) is an international shipping company specializing in the worldwide seaborne transportation of drybulk commodities.
The company has already been through a relatively recent restructuring and emergence, which we will detail in a moment. Suffice it to say, this was a streamlined situation before its recent deep value extension lower.
In March 2014, the company completed its restructuring, following which it did not own any vessels. During 2015, the company acquired eight drybulk vessels, comprising six Capesize and two Supramax, and acquired an additional two Capesize vessels between November and December 2016. They also added an additional Capesize vessel on a second hand basis that should be soon in the company’s hands (expected to be delivered between May 25, 2017 and July 17, 2017).
“We believe we have established a reputation in the international drybulk shipping industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a number of international charterers.”
The company was incorporated under the laws of the Republic of the Marshall Islands, pursuant to the BCA, on January 4, 2008, originally under the name Seanergy Merger Corp. The name was changed to Seanergy Maritime Holdings Corp. on July 11, 2008
The prior restructuring even ran its course between 2012 and 2014, as follows: In August 2012, the company began discussions with former lenders to finalize the satisfaction and release of the company’s obligations under certain of its former loan facility agreements and the amendment of the terms of certain of the company’s loan facility agreements.
Between January 2012 and March 2014, the company sold all 20 of its former vessels, in some cases by transferring ownership of certain of the company’s vessel-owning subsidiaries to third parties nominated by its former lenders in connection with the company’s restructuring.
A Brand New Day
The emphasis for the company now is on its new expansionary leanings. The company has rebuilt its fleet, as described above, but continues to push the action.
One recent press release, notes that, on May 31, 2017, it took delivery of the M/V Partnership, a 179,213 dwt Capesize dry bulk vessel, built in 2012 by Hyundai in South Korea. The Company entered into the agreement to acquire the M/V Partnership in April 2017. The Company funded the gross purchase price of $32.65 million by a secured loan facility from a European bank and from financing arrangements with the Company’s sponsor.
The stock is also in expansion mode on a technical basis at present, with a number of key signals that suggest a possible turnaround is underway. For example, technicians will see a very clear “double-bottom” bullish reversal pattern over recent weeks, with the first leg hitting in early May, and the second one around the turn from May to June. In each case, we saw a very oversold reading on a number of oscillators, indicating the increased likelihood of a potential longer-term low being put into place.
At this point, if the right macro variables fall into place, we may be setting up to see some real opportunities in the drybulk shipping space, with SHIP jumping out at us right now as a potential leading play in that move.