11/5/2008

Four companies among the 20 transportation stocks also delivered dividend enrichments: Burlington Northern (BNI), Landstar System (LSTR), Norfolk Southern (NSC) and Union Pacific (UNP). Burlington Northern and Union Pacific, however, distributed their payouts on the first day of the fourth quarter. And CSX (CSX), FedEx (FDX) and Overseas Shipholding Group (OSG), while paying out more in the third quarter, had all voted their increases in June.

Frontline Ltd. (FRO) may seek control of Overseas Shipholding. Frontline expects to contact the company's management and other big shareholders to discuss how to boost shareholder value. Frontline has about 1.5 million shares (4.9%).

8/4/2008

OSG's undervalued shares have struggled since reaching 89 last year, and its modest dividend hasn't helped its cause. But Lazard Capital analyst Urs Dur thinks its net assets are worth more than $100 a share and are "a solid fit" for Fredriksen's group of companies, which also includes Golag LNG (GLNG). OSG's model is more complex and personnel-intensive than Frontline's, its position in U.S. flag operator OSG America potentially tricky for foreign owners, and "credit is tight even for blue-chip shippers," he notes. Still, OSG has a solid balance sheet, good management and plans to buy back shares. His price target: 89.

Five transports revved up their payouts: Alexander & Baldwin (ALEX), CSX (CSX), Expeditors International (EXPD), FedEx (FDX) and Overseas Shipholding (OSG). CSX, FedEx and Overseas Shipholding, however, pay their new disbursements in the current quarter.

In the Dow transporation sector, Overseas Shipholding Group (OSG) last Monday enriched its quarterly dividend for the third year in a row. The new payout will be 43.75 cents a common share, up a generous 40% from 31.25 cents. Holders of record Aug. 6 will receive the new dividend Aug. 27. The ex-date is Aug. 4. Distributions have been ongoing since 1974. The stock changes hands currently at around 78, down from its 52-week high of 91.49, and yields 2.26%. OSG also announced a new stock-buyback authorization worth $250 million, having completed its prior $200 million program. Since repurchases began two years ago, the company, which is one of the largest crude-oil and refined-petroleum product shippers in the world, has bought back 9.3 million shares for $614 million, or 23.43% of total shares outstanding.

A group including Frontline (FRO) increased its stake to about 2.29 million shares (7.4%), from 1.63 million (5.2%) reported in March.

Citigroup upgraded three marine shipping stocks. TK and GMR were upgraded from Hold to Buy, Citigroup said. The rating on OSG was also raised from Sell to Buy, Citigroup said. Stocks look oversold, though industry fundamentals may remain weak in the coming quarters.

Credit Suisse said it is downgrading Overseas Shipping Group (OSG) to Neutral from Outperform based on expected decrease in crude tanker rates in 2008. Target price at $75.

shipping is like subprime, it may not collapse today, but when it does, watch out.