Tag - Sblk

Stocks are holding their ground through Tuesday trading as financial and homebuilder stocks stayed firm following a positive housing starts report.

At 1:49 pm ET, the Russell 2000 (NYSE:IWM) is up 9.37, or 2.43%, at 395.73, while the Dow is up 1.29% at 7,309.76, and the S&P 500 is up 1.83% at 767.68.

This morning the Commerce Department reported that construction of new homes and apartments jumped 22.2% from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

Small cap on the move today include Star Bulk (Nasdaq:SBLK), up 20% as the company’s Q4 net soars on bigger fleet. SkillSoft Public Limited Company (Nasdaq:SKIL) is also 24% higher today following a Q4 earnings boost.

Universally Reviled

I have never seen a company more determined to make itself universally reviled than AIG. It truly boggles the mind that anyone at AIG, especially those in the financial products division that lost $62 billion on credit default swaps in the fourth quarter alone, could think they should receive a bonus.

I don’t care what the contract says — if you’re party to losing $62 billion in a three-month span, you get no reward. Sorry. And if you even have to ask if bonuses can be paid with bailout money that’s keeping your business going, your moral compass is seriously out of whack.

And it doesn’t end with the bonuses. Of the $170 billion American taxpayers have dumped into the bottomless pit that is AIG, $106 billion was paid out in settlement for the credit default swaps that AIG guaranteed.

$11.92 billion to France’s SocGen, $11.8 billion to Deustche bank and $12 billion to Paulson’s own Goldman Sachs. Well, isn’t that nice. We’ve paid off foreign banks, and our former Treasury Secretary made sure his alma mater got its payoff, too.

This is dirty business. And if Paulson knew the extent of Goldman’s exposure to AIG, and it’s impossible to think he didn’t, he needs to be called to . . .

The Russell 2000 (NYSE:IWM) closed lower on news that Wachovia Corp. (NYSE:WB) suffered a first-quarter loss. The small-cap index fell 2.09 points, or 0.30%, to 686.07. The Dow Jones Industrial Average declined 23.36 points, or 0.19%, to 12,302.06.

On a year-to-date basis, the Russell 2000 has shed 10.44%, while the Dow is off 7.26% and the S&P 500 is down 9.54%.

The bears and the bulls tangled but the bears were eventually victorious as investors reacted to news before the opening that Wachovia Corp. (NYSE:WB) swung to a first-quarter loss and will sell common and preferred stock to raise capital.

The Charlotte, N.C.-based bank has been relatively less exposed to the subprime mortgage mess than the other major financial institutions, leading to speculation that more players will report losses.

Banks were among the worst hit industry groups today. Among those . . .

Comparative advantage can be readily witnessed in specific country output: Germany, beer; France, wine; Switzerland, watches; United States, media; Colombia, coffee. And then there's Greece, which has long demonstrated a persistent comparative advantage in bulk-ocean shipping. It's an advantage we expect Athens-based Star Bulk Carriers Corp. (Nasdaq: SBLK), a major transporter of iron ore, coal, grains, bauxite, fertilizers and steel products, to perpetuate well into the relevant future.  

Star Bulk is a newbie to both the world's shipping lanes and the U.S. equity markets. The company, incorporated in the Marshall Islands on Dec. 13, 2006, and is the product of its Nov. 30, 2007, merger with Star Maritime Acquisition Corp., a special-purpose acquisition company, leaving Star Bulk as the stand-alone entity. It subsequently received Nasdaq-listing approval, with trading commencing Dec. 3, 2007.

In its new form, Star Bulk operates a fleet of eight dry bulk carriers, and has a definitive agreement to acquire two dry bulk carriers. The fleet consists of three capesize, one panama and six supramax dry bulk vessels, with an average age of 11 years and a combined cargo carrying capacity of 927,800 deadweight tons. Vessels are classified into four categories based on their carrying capacity in deadweight tons: handysize (10,000-39,999 DWT), handymax/supramax (40,000-59,999 DWT), panamax (60,000-99,999 DWT) and capesize (higher than 100,000 DWT).

Last week, Star Bulk reported its first public financial statements. Net income posted at $1.61 million, or $0.05 per share for the fourth quarter, compared with $620,000, or $0.02 per share, in the same quarter last year, on reported total revenue of $3.69 million. But since Star Bulk is such a different animal compared to last year, the numbers are essentially meaningless.

When Paragon Shipping Inc. (Nasdaq: PRGN) became a public company last August, investors who didn’t set sail with the initial offering priced at $16 might have figured that they had missed the boat. Or not.

The Greek shipping company, formed in 2006, immediately faced some rough seas, with its stock price falling nearly 10% on Paragon’s first day of trading. Put an asterisk next to that drop, however, because on that day, Aug. 10, the U.S. stock markets were roiling through one of their all-too-typical gyrations southward, with the Dow Jones Industrial Average sinking as much as 320 points during the trading session.

Since then, shares of Paragon have been buffeted by the economic headwinds generated in the United States, which have blown across the globe. The young stock crested at $27.34 on Oct. 29, and recently sank as low as $12.51, on Jan. 22.

Analysts who are tracking Paragon don’t necessary believe this is a shipwreck waiting to happen. According to Thomson Financial, two analysts have Paragon at a “buy” rating, while another rated it a “hold.” The median price target calculated by Thomson is a healthy $26.50 — above Monday’s closing price of $18.

Industry estimates place the demand for seaborne dry-bulk shipping growing at better than 6% annually since 2001. While the U.S. economy struggles, the rest of the world is doing all right, with global output having grown about 5% last year. Demand for dry-bulk shipping — Paragon’s specialty — has been rising substantially for more than a decade, and the company has routes serving high-growth nations China and India, as well as other parts of Asia.