저자: UnrivaledInvesting진행자 · 외국인
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하워드 막스(오크트리) 포트폴리오의 대형 보유 종목 TORM(TRMD)을 분석. 오크트리가 약 40% 지분을 보유하며 주주 정렬이 양호하다고 평가. 다만 TORM은 스팟 운임에 크게 노출된 가격 수용자(price taker)이고, 운임이 2024년 저점 부근으로 하락 중이며 배당 축소 위험이 있음. 순자산가치(약 주당 35달러) 대비 주가(약 18달러)는 할인 거래. 진행자는 성장 가시성이 낮아 자신의 체크리스트에서 탈락한다고 결론.
다듬은 글
with the US indices near all-time highs yet facing increasing volatility increasing uncertainty some investors are looking to a potential Safe Harbor they're looking for potential value Investments That might protect them with more volatility so this got my interest when Dimitri asked me to look at Howard Marx's portfolio and his big bet in torm stock trmd is the ticker representing about a quarter of their 5 billion ion Dollar Plus public equities portfolio for those that aren't familiar Howard Marx is the founder one of the founders of oak tree Oak Tre is now owned by Brookfield but oak tree has a deep value Focus so this is not a growth at any cost type of investor this is a growth this is a investor that's looking to find deep value not hyper growth and the Deep value oftentimes means hey can I find something at 50 cents on the dollar or less that I think is very likely to be worth a dollar in the future and having a long-term mindset now sometimes it'll even involve some sort of you know complex restructuring where you're buying bonds and through those bonds you're effectively buying that dollar at 10 cents or maybe 20 cents and hey if you can do that enough times you can generate a great return and that's what oak tree has done over time so I'm I am interested in what's going on with torm especially when I see that over the last six months it's gone quite a haircut losing about 50% of its value trading around two times price to earnings a 30% dividend yield okay so what are they doing you know is this dividend yield sustainable what are my thoughts on torm let's let's dive into understanding what do they do if by the way if this is your first time tuning 'm looking for potential multi-baggers the types of stocks can go up hundreds or even thousands percent over time I'll talk about my checklist towards the end of this video in terms of you know what's what's right for me on my own personal investment Journey you know because everyone's everyone's different and they're looking for different things so let's go through what Howard marks at Oak Tree might be seeing with torm so torm they operate a fleet a little under a 100 tankers around the world 3,400 seafarers operating these ships and you're talking about long range and medium- range vessels shipping refined oil products and chemicals around the world and you can see that this company has over a hundredy year history dating back to 1889 with dlev eorm and then you know you're talking about a Copenhagen uh Stock Exchange listing and then oak tree this this gives you a perspective of the mindset that oak tree has this is not a short-term day trader they first you know were getting involved with this company about a decade ago and they entered a deal where they contributed 25 vessels to this effectively this new Co and they also did a restructuring so they were investing in the bonds of torm and so through that they have emerged as majority owner now I think they've been selling down their stake a bit but as of the most recent update it appears that they still own around 40% of the company so still one of the largest holders for torm so let's understand what's going on here so we understand it's a tanker company with around a 100 different tankers and they talk about being a pure play product tanker so that means you know they're they're tied very closely here it is to the spot market so what effectively you can lease these tankers at and they talk about Superior economic results through you know one platform where they manage all their ships uh and they're they're targeting creating shareholder value talking about long-term returns and growth and paying out their free cash flow as a dividend so given that oak tree is appears to be the largest shareholder there is some alignment with the minority shareholders that there's less risk that they're just going to do some crazy like hey we're just gonna we're going to own the biggest Fleet that's not their aspiration if you if your goal is to own the biggest Fleet your return on Equity your return for shareholders might be really low the fact that they're talking about hey our focus is on long-term returns and that you know you have a smart shareholder there is alignment with let's say smaller investors that are interested in getting getting involved now one of the Dynamics in the shipping industry is that you know as the the ranges of the trips change it'll obviously impact the number of boats there and and the amount that you can charge and one thing that impacted the recent rates uh is the sanctions against Russia where you know if you have a bunch of European countries no longer getting getting uh oil from or gas from Russia then you're going to start getting it from other places and that requires longer shipping routes and then Russia is no longer sending it to Europe so then they're you know sending it to South America and they're sending it to Africa once again requiring more ships for longer routs and so that is something that benefits shipping rates another you know aspect to consider so this is this does reflect so you have a global Shipping market in terms of what's the rate for long range and medium- range boats then you have political dynamics that are going to impact those rates and then you layer in another aspect which is supply and demand you know what is the number of boats what's the demand for the underlying good that's on those boats you know the the oil refined products and chemicals so another example of geopolitics is you had the houthi terrorists you know firing missiles at boats cargo ships and so then they're going go okay we're no longer going to go by the Red Sea we're going to go by the Cape of Good Hope and yes that's a much longer trip to send the goods and so if you're talking about longer trips ultimately that means you're going to have a greater demand for more ships ultimately higher rates for those vessels so that's you know it's showing a before and after in terms of what the trip used to look like and now a much longer trip just to avoid some terrorists um you know and this is it's important to reflect on if you have different types of leaders and one leader that's like hey I won't take this nonsense and if you fire missiles on a shipping route I'm going to wipe you out you know not holding back at all that will change shipping prices and so one could argue the incoming election of Donald Trump is going to impact shipping prices lower because of this you're going to have more straightaway routs because the expectation is that you know he's not going to you know pull any punches if if he has to and so you can see the historic uh shipping rates for and Clarkson's I think is the the company that Aggregates all this data for the medium- range and long range benchmarks and you can see how it's the the dotted lines shows how it's sort of varied over time during Co it shot up then you know during the subsequent recession you saw the rates go down and you see these are the averages versus where you know it sort of bounces around and you could see subsequent to the recession you know where we emerged out of the lockdowns you saw rates ended up much higher plus that Invasion the Russians Invasion and Ukraine combined with the houthi uh terrorist attacks you see that broadly rates are higher than even during covid so looking at tanker rates you know very favorable to Prior Peak conditions but if you were to say hey what does it look like during a recession or you know previously downturns uh let's say oil price crashes um you know what does it mean for the long-term earnings power of this business and I think it is important to reflect that this is ultimately a price taker and every investor has to figure out their own Journey personally I don't like commodity type businesses I don't like price takers where they when you're a price taker someone else is effectively dictating your journey and by by someone else it could be a bunch of other shipping companies that say hey we're going to have rapidly expand our Fleet well rapidly expand expanding your Fleet impacts the rate that you can charge for your ships so that's what I mean by price taker I I do not like those types of companies I prefer the this is our price you know give it or take you know take it or leave it and by the way we have a little bit of pricing power and we expect to raise rates each year you know that's the type of investment or type of business I'm I'm more interested in and you can see you know how the different rates have fared over time the red line is 2024 and you can see it's broadly I think heading lower versus where it's been the last few years the dotted Gray Line is sort of the average and so it's you know at one point ear earlier this year it was higher now it's trending lower than the average and so this is sort of a concern is where does it go in the future what are my thoughts on torm based on these Dynamics quick plug this direct qu it's a direct quote this follows Robin another premium member saying the information Services you provide to me are invaluable nvestment ideas come check it out unrival investing.com so just a few days ago December 16th one analyst post that commodity shipping rates sync to new 2024 lows asking do lower spot rates signal a broader deceleration of the global economy so there is this concern that rates have continued to woren talking about LR2 rates so the long range two product tanker spot rates currently around $24 $25,000 this is a lot lower than where they were operating operating at earlier for torm where you're talking about $40,000 so this is a sizable haircut this is down 50% uh on the year based on the same Clarkson's data it looking at medium range also down significantly over 30% down to around 28,000 so this is arguably sizable headwind that torm is going to be facing you haven't yet seen it in the results this is based on the current spot rate which will flow through in the coming quarters they need to work through their existing contracts their presentation did talk about as I already showed that they are heavily tied to the spot market so those contracts will flow through very quickly and this new lower spot rate because of either increased you know supply of vessels or weaker geopolitic weaker um you know demand for the goods or just a dynamic of the shorter traveling distance because of perception of lower geopolitical risks you have all these different d Dynamics but the the key the key performance indicator that you you need to follow that sort of drives the returns is what is the shipping rate doing and that's near lows that's going to impact their results in the coming quarters so looking at this business I think it's just really tough I already said I don't like commodity companies I don't like price takers you can see in 2021 during the recession you know their operating cash flows or their eida was around $140 million this is before their $40 million in interest expense and you see just how the improved rates just dramatically changes the profile of this business it's a multiple difference from $140 million to around 850 this wasn't like they doubled their ship count this was primarily because of the leverage on what they get from the shipping rates and to go from $100 million to $800 million that's a big difference and you can see it in their cash flows as well from 50 million to $800 million so that's it's just a a big big difference you know a 20x difference because of the shipping rate that is just so important for investors to understand that is super tough so when I look at it thinking about you know they're paying hundreds of millions of dollars in dividends you know just this past year and once again going back to the fact that yeah it's driven by the fact that their you know cash flow is benefited nicely from higher shipping rates but could you get back to you know one of these types of lower rates where you're not generating hundreds of millions but maybe generating just a hundred million well if that's the case then I think it's a lot you know it's it's unlikely to see the dividend where it is you know this $100 million plus per quarter in dividend payments that that could turn into $100 million per year so you could have a sizable dividend cut you know for torm in the future however you know I it would surprise me to see oak tree continue to sort of trim their stake because you can see their net asset value per share so the way to think about that is look at the value of the ships in terms of how much did it cost for them to acquire them uh what are what are they marking their their ships at less the cost of their debt you know less the total debt outstanding and any other sort of liabilities and they're saying net net all that out the net asset value of this business now you're probably throwing in some Goodwill and stuff like that but overall the net asset value of this business is around $35 per share and that's you know that's what they're sh saying based on their most recent report things changed a little bit they acquired you know I think two more vessels but ballpark you're you're talking about that you know around $35 and so here it is when you're looking at a share price around 18 that is the market saying like there there's a big disconnect to what these ships are worth right now suggesting once again either over Supply weakening demand or shorter Roots because of lowering you know geopolitical tension so this the reason why I'm sharing all this is number one it's always interesting to see you know these these types of situations two times PE 30% dividend but I think it's important for every investor to have their own Journey because this might work out well from here you know I think the Deep value investors like oak tree might say hey we've already invested for the last 10 years once again it's trading below significantly below Book value you know like a 50% haircut maybe it gets reset to you know Book value again sometime in the next decade I just don't like that approach to investing I recognize that it can work well because it protects your downside my own personal investment checklist is I want to find line management which which you have here because arguably you can swap out management with uh shareholders and when you have a sizeable shareholder 40% that's smart and thinking about creating long-term value you do have that alignment so even if I were to consider buying shares I do have faith that they're not looking to necessarily screw over the minority shareholder they would be looking to say hey we're looking to create long-term value it's not about Empire building it's about creating value for shareholders so from alignment I feel pretty good compelling valuation understand it trading under you know Book value obvious growth potential is a bit trickier and that's the one where ultimately it fails on my check list which is saying you know can you say with 90% certainty that this business should be bigger five years from now and be significantly bigger five years from now and I just don't think I can do that I I don't think it's obvious to me at all and I'd say the shipping rates and the current discount to book value also suggests that uh and so this is why every investor is going to have their own Journey this is an important part for my own personal investment journey and that's why you know like I I just did my second exclusive video for my unrivaled nation uh yesterday and like two of the three ideas you could argue three out of the three ideas it's fairly obvious that management you know management owns like 40% of the company that they're saying this is how we easily double the the company over the next five years so I would much rather take that bet pay 10 to 15 times free cash flow where I'm saying yeah management has a lot of skin in the game and there's a clear path to doubling the fundamentals of the business now you might say this has the compelling valuation so that way shareholders could see a double over time because it goes from half of book to one times book but I would rather buy something closer to you know 0.
n times book or one times book and be very confident Book value be very confident that book value should increase by you know 50% or you know 2x over time and so looking at this blowup risks I don't think you you really have to worry about it I mean you could have continued rate pressure I mean they do have a little bit of debt I think around 800 900 million in debt but given that their Fleet of ships is was valued around $3 billion that should be able to cover their debt plus oak tree after all this time worse comes worse you thrown another 50 million do if you needed to something like that just to make the lenders happy so I I view this as a you know it checks most to the checklist but it fails on that key item which is obvious growth once again every investor needs to have their own investment Journey some people will just gravitate towards these types of deep value plays and they'll feel comfortable in it personally I would rather have the obvious growth where where most companies you know you you can't do it where you can't say you know this is like 80% you know you have 80% confidence that this will be much bigger in the future uh because oftentimes there's that trade-off of well the valuation is just not compelling it's just it's obvious but the valuation is too Rich so every investor needs to figure out what's right for them I hope this video talking about torm Howard marks the Deep value approach
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