TBS International [TBSI] Stock Analysis

The Bull Trader reader, Michael B., wrote in to give his thoughts on TBSI, TBS International Limited stock.

“I am writing to you about TBSI (Nasdaq).

A little more about TBSI: TBS International Limited, an ocean transportation services company, offers shipping solutions through liner, parcel, bulk, and vessel chartering services. Its liner, parcel, and bulk services primarily carry steel products, salt, sugar, grain, fertilizers, chemicals, metal concentrates, aggregates, and general cargo. The company also provides short and long-term time charters that offer its customer an alternative means to contract for ocean transportation of cargoes and make the carrying capacity of entire vessels available to its customers. In addition, it provides frequent regularly scheduled voyages in its network, as well as cargo scheduling, loading, and discharge for its customers. Further, TBS International’s parcel service originates in Peru, Ecuador, or Chile; and carries metal concentrates, beet pulp pellets, and fertilizers to East Asia.

The chart on TBSI is extremely bullish: The Point & Figure chart gives it an overall $52.50 target.

The short-term stock chart is also very bullish:

There is no insider selling, they have an extremely low P/E and their comments on the CC call were very positive (Rates to stay strong thru the rest of the year, the value of the fleet is worth at least 25% more than what is on the books. They continue to see a strong market).

What is helping TBSI is also the fact that it’s in a very hot sector. Jefferies (which has been the only analyst) has been raising the target on the stock during the last few weeks:

April 30, 2007 TBSI dry bulk charter rates should stay strong through 2008-Buy@JEFF – Jefferies believes dry bulk shipping fundamentals should stay strong through 2008 and raised TBSI shares to $18 from $14

May 16, 2007 TBS International-TBSI still attractive despite appreciation-Buy@JEFF – Despite the move higher, Jefferies believes TBSI shares are attractively valued given the strengthening dry bulk supply/demand fundamentals and the company’s strong balance sheet. Target raised to $25 from $18.

Although I hate listening to analysts, I do think that TBSI has a good shot of reaching the $24-$26 level sometime in the near-term. Looks to me like a lot of money is coming into this stock/sector, and they are definitely not disappointing with their earnings.

I have initiated a position in TBSI and suggest that you do your own due diligence before buying it or any other stock that I talk about.”