Bankruptcy Risks Defined

First things first — it’s important to clarify a few points: (1) markets will price bankruptcy risks into stocks that have little *real* bankruptcy risk at times and (2) one’s own view of bankruptcy risks can differ significantly from the rest of the market. This is important to note because I am probably more likely to jump in if I believe the market is overreacting to the risks.

Over the past two months, a very significant chunk of the overall market has been priced with some degree of "bankruptcy risk" at various points in time. Some stocks have been priced with a minor bankruptcy risk. US Steel (X) back in early December was a good example. For a time, it was priced at about a 50% discount to book value in the $25-30 range. You could speculate as to the reasons for this, but I’d suggest the three major factors could be (1) belief that X would incur significant losses in the near-term, (2) belief that X’s assets were overvalued, and (3) a bankruptcy risk stemming from X’s moderate to high level of leverage (63.3% liability-to-value).

As I don’t see much of a reason that X’s total assets would depreciate in value significantly, factors (1) and (3) became more important to me; however, if you ignore factor #3 and ascribe the valuation solely to factor #1, that would suggest that investors believed that would X would incur heavy losses for nearly half-a-decade (going by a reasonable DCF analysis). Even in the ultra-bearish market, that seemed like a stretch to me, so I’d surmise that the market had priced an additional bankruptcy risk into US Steel. It’s not a huge bankruptcy risk and I’d describe it as "minor" but it was still there. Arguably, with the price back in the lower $30 range, it might have a minor bankruptcy risk priced into it again.

While US Steel is a good example of a stock with a “minor bankruptcy risk” priced in, there are other stocks priced with a major bankruptcy risk. Back in December when Dryships (DRYS) was selling below $4, it appeared to have a major bankruptcy risk priced in. Dryships’s book value is around $28; and that is probably understated a bit since that’s from its last 20-F and it had significant cash flows earlier this year. Under $4, the stock was selling at more than an 85%-90% discount to book value. Certainly, things look very scary in the dry bulk shipping industry and the market is probably factoring in some heavy losses coupled with asset write-downs into DRYS’s stock. However, even factoring in all of that, I find it hard to believe that the stock would be trading at an 85-90% discount with no other factors present. Given DRYS’s heavy leverage, I surmised the market had priced a “heavy bankruptcy risk” into Dryships’ stock.

danas je mali promet na burzi, mali na atlpl….
koliko je danas forumaša prodalo/kupilo više od 50 dionica atpl?
pitam u svrhu dokučivanja nekih zakonitosti.
može na privatnu poruku…

hvala

Asian Stocks Gain on Government Efforts to End Credit Crisis
http://www.bloomberg.com/apps/news?pid=20601089&sid=anp080kI282M&refer=china
Baltic Exchange Capesize Index TM 1709 (DOWN 51)
Baltic Exchange Panamax Index TM 492 (DOWN 4)

Sutra mislim da bi Panamax index mogao porasti, a Capsize če i dalje padati.
Go Go Baraka Obama (kuča meni, kuča tebi).

hvala Transakcije
Cijena Količina Vrijeme
783,30 19 15:59:34
783,30 6 15:59:17
789,00 2 15:58:52
786,05 20 15:50:23
786,05 30 15:50:23
783,00 14 15:50:13
783,50 5 15:50:13
783,50 17 15:50:13
783,51 8 15:50:13
783,55 5 15:50:13
783,55 15 15:50:13
783,56 15 15:50:13
783,56 30 15:50:13
783,56 30 15:50:13
783,56 30 15:50:13
783,56 30 15:50:13
783,56 30 15:50:13
783,56 35 15:49:52
783,65 40 15:49:52
783,66 20 15:49:52
783,77 35 15:49:52
784,00 6 15:49:52
785,00 15 15:45:55
785,07 10 15:45:55
789,99 12 15:44:41
789,90 8 15:44:41
787,00 20 15:44:41
787,00 10 15:44:41
787,03 20 15:44:39
787,03 30 15:44:39
789,00 30 15:41:17
789,00 16 15:39:36
788,15 3 15:37:47
788,15 17 15:37:47
784,80 27 15:36:41
786,50 2 15:36:13
786,50 30 15:36:13
786,50 15 15:36:13
786,50 15 15:36:09
786,50 15 15:36:09
787,00 15 15:36:09
786,50 20 15:33:59
789,99 30 15:17:26
787,50 16 15:17:26
780,01 1 15:11:15
780,01 10 15:10:59
780,01 20 15:10:59
780,00 10 15:08:29
785,00 15 15:01:43
785,00 30 15:01:43
785,00 30 15:01:43
776,00 14 14:57:18
776,00 2 14:57:18
781,00 51 14:56:15
780,00 20 14:56:00
775,07 65 14:50:18
775,10 15 14:50:18
780,00 20 14:50:18
779,00 24 14:45:57
779,00 10 14:45:38
779,00 4 14:44:07
779,00 10 14:43:53
780,00 28 14:43:31
772,01 5 14:42:22
772,01 30 14:42:22
772,01 30 14:42:22
772,01 30 14:42:22
772,01 30 14:42:22
780,00 15 14:42:10
780,00 15 14:41:14
780,00 20 14:39:27
771,00 2 14:39:05
775,00 20 14:39:05
775,50 34 14:39:05
776,00 76 14:39:05
780,00 20 14:38:29
780,01 27 14:38:29
780,01 3 14:38:19
781,00 20 14:38:19
782,00 16 14:37:54
782,00 30 14:37:54
782,00 30 14:37:54
782,00 30 14:37:54
782,00 30 14:37:54
782,00 70 14:37:54
782,03 14 14:37:54
782,03 40 14:37:29
782,03 14 14:35:46
782,03 90 14:35:46
782,03 10 14:34:52
783,13 32 14:34:03
783,15 69 14:34:03
783,23 21 14:34:03
784,00 30 14:34:03
787,00 2 14:28:16
787,00 3 14:24:27
787,00 7 14:23:24
790,00 1 14:22:03
790,00 9 14:21:46
790,00 1 14:19:28
790,00 4 14:16:32
790,00 2 14:16:22
791,06 8 14:16:22
792,00 13 14:15:11
792,00 10 14:15:11
792,01 10 14:15:11
792,01 21 14:15:11
791,06 17 13:57:26
790,00 4 13:54:34
790,00 15 13:54:34
791,02 30 13:54:34
791,04 8 13:54:34
791,04 8 13:53:47
792,00 4 13:53:47
792,06 15 13:53:47
794,00 13 13:53:39
792,00 1 13:51:03
791,02 10 13:49:18
791,02 15 13:48:59
791,02 5 13:47:58
791,11 11 13:47:58
791,20 30 13:47:58
791,21 20 13:47:58
792,77 23 13:47:58
793,00 18 13:47:58
793,02 6 13:47:58
794,10 17 13:47:58
794,20 11 13:47:58
800,00 5 13:28:17
800,00 79 13:28:17
806,99 3 13:28:04
800,00 331 13:27:25
801,00 15 13:27:25
801,10 10 13:27:25
801,10 30 13:27:25
801,10 30 13:27:25
801,10 30 13:27:25
802,00 25 13:27:25
802,01 11 13:27:25
802,10 271 13:27:25
802,11 45 13:27:25
806,01 2 13:27:25
806,01 8 13:24:26
806,01 10 13:24:26
806,01 7 13:24:26
806,01 3 13:23:39
806,01 4 13:23:39
806,01 1 12:51:58
806,01 5 12:47:17
806,01 7 12:47:17
806,99 1 12:45:39
806,99 17 12:39:21
806,01 3 12:38:10
806,01 10 12:38:10
806,01 3 12:38:10
806,99 15 12:29:23
806,01 7 12:28:46
806,01 10 12:28:46
806,01 10 12:28:46
806,01 5 12:28:46
806,30 50 12:28:46
806,50 11 12:28:46
806,50 10 12:28:46
806,70 70 12:28:46
806,71 19 12:28:46
806,73 8 12:28:46
806,75 15 12:27:22
806,75 50 12:26:14
807,00 11 12:25:11
807,00 50 12:25:11
807,00 50 12:25:11
807,00 50 12:25:11
807,00 16 12:25:11
807,50 100 12:25:11
808,00 13 12:25:11
808,00 20 12:25:03
808,00 40 12:24:12
808,00 35 12:24:12
810,00 20 12:21:56
810,00 50 12:21:30
810,00 10

nije stalo sve hebiga…ajd noc svima….

hvala inv…
znam, nije popularno ovakve stvari pi(s/t)ati, no ne znam jel’ slučajno ili nije:
nisam mogao kupiti ništa na sitnijim nalozima sve dok nisam lupio jedan veliki, 200 kom., niži.
sve prošlo u sekundi.
ok, puno pitam za svoje godine, u red sa jedinicama, molit ću…

atlantska ima samo ove godine cca12milja eura za bruto plaće davanja…
738 zaposlenih.
eej, sedamstotridesetiosam!

hvala inv…
znam, nije popularno ovakve stvari pi(s/t)ati, no ne znam jel’ slučajno ili nije:
nisam mogao kupiti ništa na sitnijim nalozima sve dok nisam lupio jedan veliki, 200 kom., niži.
sve prošlo u sekundi.
ok, puno pitam za svoje godine, u red sa jedinicama, molit ću…
[/quote]
slučajno – ja sam mogao…

794,69 Prosječna juče.

imaš firmi sa puno više zaposlenih, oće reć više davanja, a sa puno manjom dobiti, to nisu mjerila.

danas barem znamo da radi investor. I opet polagano.. Kao da ni ovčice a ni pastiri ne znaju kuda bi….

Opet status quo do objave BDI i otvaranja u dvorištu kod Baracka Husseina Obame..

Kavice, doručak i ostalo do popodneva..

čeka se promet na burzi čim osvane bdi…

čovjek bi rekao da smo otočna zemlja i da je brodarstvo sve što imamo u zemlji 🙂

šalu na stranu, atpl 2 milje, cijeli krobi (uključena atpl) 6,4milje nakon 100 minuta rada burze…