Shareholders don't just own stocks. We invest in businesses. Every share we buy purchases a stake in a company -- a sliver of a living, breathing enterprise run by a management team that ultimately determines the fate of the money we invest.
That's why The Motley Fool regularly contacts public companies and executives on our community's behalf, asking them the questions shareholders would find relevant. Because while quantitative measures are important, it's also crucial for investors to assess the less tangible aspects of the businesses they own (or are thinking of owning).
We recently surveyed select companies to gain insights into their business. Today we highlight StealthGas (Nasdaq: GASS ) :
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Headquarters
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Greece
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Market Cap
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$140 million
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Industry
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Oil and gas storage and transportation
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Related Companies
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Frontline (NYSE: FRO ) , Tidewater (NYSE: TDW ) , DryShips (Nasdaq: DRYS ) , Teekay (NYSE: TK )
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Following are StealthGas CEO Harry Vafias' answers to our email query about the business.
What steps have you taken to navigate your business through the economic turmoil of the past 12 months?
We have been conservative since day one -- i.e., our IPO in October 2005. We didn't overleverage the company, we didn't overexpand, we didn't dilute our shareholders with ATMs and share offerings and cheap levels, we didn't enter more risky shipping segments than our core niche (the handy LPG market, etc.).
Also, we have stopped the dividend to build up cash reserves, we have tried to fix more of our vessels on period contracts, we have pushed back the deliveries of our Newbuildings by about one year, and we have focused in cutting the running costs of our fleet. And finally, we have stopped giving bonuses and shares to our staff and management.
What are the top two or three metrics to which your business pays the closest attention?
The most important metrics are:
- Supply of new ships coming into the market, versus the scrapping of older ships.
- Growth in demand for gas, especially from developing nations like India, China, and South America, etc.
Now that the first decade of the new century is drawing to a close, we'd like to take a moment to reflect on what lies ahead. What excites you most about your business?
We are quite pessimistic for 2010 but cautiously optimistic for 2011 and thereafter.
The exciting thing about the gas market is that it's green; it's a necessity -- people really need this form of energy; there is huge potential for growing demand from developing nations like China, India, Africa, South America, etc.; and a very important fact that few people know is that the orderbook for these ships is very small.
Thus, in 2011 and later there will be a shortage of modern ships because more and more of the over-25-years-old will be going to demolition. That, coupled with an economic recovery, will lead to very strong day rates and hopefully some nice profits for us who control the largest fleet in this segment, about 50 ships (including Newbuildings).
StealthGas is rated five stars (out of a possible five) by our Motley Fool CAPS community. Do you agree with our community's bullish assessment? Click here to rate the stock and cast your opinion.
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