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GRIN

Grindrod Shipping Holdings NasdaqGS:GRIN Stock Report

Last Price

US$19.44

Market Cap

US$368.5m

7D

3.8%

1Y

71.4%

Updated

10 Aug, 2022

Data

Company Financials +
GRIN fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance4/6
Financial Health4/6
Dividends4/6

GRIN Stock Overview

Grindrod Shipping Holdings Ltd., an international shipping company, owns, charters-in, and operates a fleet of dry bulk carriers and tankers worldwide.

Grindrod Shipping Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Grindrod Shipping Holdings
Historical stock prices
Current Share PriceUS$19.44
52 Week HighUS$28.98
52 Week LowUS$11.08
Beta0.95
1 Month Change27.06%
3 Month Change-17.17%
1 Year Change71.43%
3 Year Change250.90%
5 Year Changen/a
Change since IPO14.35%

Recent News & Updates

Jul 13

Grindrod Shipping Looks Fundamentally And Technically Oversold

I believe GRIN is attractive enough for both a short-term speculative buy and a longer-term dividend buy - the bull cycle in shipping is not over yet. In my view, the slowdown in Chinese economic activity is a new reality, but it does not cancel out the demand for the active use of bulk carriers. Given Grindrod's operating efficiency (cash flow generation - CFO), the stock looks undervalued by 30-80%. By evenly adding to the position at such oversold price levels, the investor partially eliminates the risks of a deep drawdown and increases the probability of making money on each new purchase, in my view. Instead Of An Investment Thesis Recently, more and more information is emerging about a new wave of coronavirus that could dampen demand for raw materials for heavy industry companies, as it did in 2020 - which is probably why shipping stocks are falling so sharply. We see the same in commodity prices - the Dow Jones Commodity Index, which tracks a broad range of 28 different commodity futures contracts, including metals, agricultural products, and energy commodities such as oil and gas, is down 19% from its highs: Data by YCharts In my opinion, however, these fears are somewhat exaggerated - yes, the slowdown in Chinese economic activity is a new reality, but it does not cancel out the demand for the active use of bulk carriers in world trade. An example of a high-quality dry bulk shipping company that has become oversold is Grindrod Shipping Holdings Ltd. (GRIN), which I cover regularly here on Seeking Alpha. Now the share price has approached the price level from which I published all my bullish articles: My rating on GRIN with notes, Seeking Alpha Since not much has changed structurally in this shipping industry, I think GRIN is attractive enough for both a short-term speculative buy and a longer-term dividend buy - the bull cycle in shipping is not over yet. My General Reasoning Everyone is afraid of the state of the Chinese economy and the fact that steel production could drop significantly due to the danger of the property crisis slipping out of the CCP's control. A drop in demand for steel will lead to a drop in demand for iron ore, one of the main transport products for bulk carriers. Since this really makes sense - no one has canceled the property debt crisis in China as well as slowdown in the global economy - I believe that not everything is so bad and that we should not only look at the demand side but also the supply side. The dry bulk shipping market differs from the container shipping market in many ways, but one of the most important differences, in my opinion, is the size of the orderbook. Dry bulk carriers make up 21 percent of the world's merchant fleets, and it takes years to build a single vessel. So, everyone is looking at the order book to see how many new ships will be at sea in the coming years. So far, the order book for dry bulk carriers looks quite good for the industry, accounting for only 4.7% and 6.6% of the total Handysize and Supramax fleets respectively. At the same time, the number of vessels is expected to increase the fleet by 2.2% and 0.4% in 2022 and 2023, respectively - most new orders could set sail in mid-2024 at the earliest, according to Grindrod Shipping Holdings' management. GRIN's IR materials At the same time, according to Splash, the order book of container ships is reaching an all-time high - the ratio of orderbook-to-fleet is currently 25% (or 27% if orders under negotiation and those not yet confirmed are included). Back to bulk carriers: according to GRIN, 22% of the bulk fleet is 15 years or older and 11% of the bulk fleet is 20 years or older, measured by deadweight tonnage ((dwt)). Approximately the same conclusion was reached by the management of Precious Shipping in February this year with a small addition - ship recycling decreased by 64% in 2021 compared to 2020, despite the increase in vessel utilization. This was a consequence of high demand, but at the same time also of necessity on the supply side - if new ships do not appear for a few years, the old ones have to be used actively. There are operational risks to this approach - if your fleet is relatively old, you will need to repair it more frequently after more intensive use - this will affect fleet utilization and asset turnover. Therefore, those with a relatively new fleet are in a better position. GRIN is one such company, with 15 Handysize and 9 Supramax/Ultramax vessels, which are on average 9.56 and 5.2 years old respectively (dwt-weighted): Author's calculations, based on GRIN's data The age of 7 chartered - in Supramax/Ultramax bulk carriers are also quite young - is about 5.5 years (also dwt-weighted). Due to limited supply in the bulk carrier market, Handysize and Supra/Ultramax vessel prices have risen 10% since the beginning of this year (last quarter data). We are now seeing bulk carrier stocks trading significantly lower than YTD, although their assets should be positively revalued (especially newer assets like GRIN's). The dynamics of the fundamental operational indicators also speak for the medium-term growth potential of GRIN. For this assessment, I like to use Piotroski's F-score - this criterion comprises 9 ratios showing a company's creditworthiness, profitability, and operational efficiency. In recent years, this criterion for GRIN has increased but has not reached the maximum score of 9. This was the case until recently - now the TTM score of this criterion indicates a continued improvement in the company's business dynamics: GRIN, YCharts, author's notes A few words about valuation. It is quite difficult to make predictions in a cyclical industry, but looking at the recent past, I realize that GRIN should be valued at about the same level as Safe Bulkers (SB) or Eagle Bulk Shipping (EGLE) given its operating efficiency (in terms of cash flow generation - CFO), which implies a share price upside of 30-80% (rough calculation based on EV/CFO ratios comparison): Author's calculations, based on SA data Some Signs Of GRIN's Oversold-ness Now a few words about how I see the technical picture of GRIN. Before any serious talk of the "new destructive wave of the coronavirus," the stock was following the RSI almost perfectly - local oversold and overbought levels were actively bought and sold, allowing speculators to earn on the medium-term upward movement of the price. At some point this no longer worked - liquidity began to dry up sharply and the breach of the RSI level at 35 did not lead to recovery as in previous periods. On the contrary, since then the share has fallen by another 25% and continues to fall now. Investing.com, GRIN, author's notes Now the RSI is already at a level just above 28, having crossed the critical threshold of 30 on 6 July and also not leading to an appropriate bounce back. In my opinion, for speculative purposes you can open a LONG position now - the price has yet to fall to a strong support level of around 7-9% and we cannot know when a reversal will occur. If you open a 1/3 position now and leave the rest in case of a further fall, you can get a good average purchase price that can be realized on a pullback. Historically, a speculator who bought GRIN at an RSI of 35 or less, with a take profit of 30% and a stop loss of 10% (risk/reward = 1/3) has earned an average of 3.4% per trade over the last ~4 years (18 trades in total with a win rate of 33%): TrendSpider software, GRIN, RSI testing Author's note: Special thanks to fellow SA contributor Danil Sereda (see our association in my bio description) for running the TrendSpider software to obtain the above information. By evenly adding to the position at such oversold price levels, the investor partially eliminates the risks of a deep drawdown and increases the probability of making money on each new purchase, in my view.

Jul 06
The Trend Of High Returns At Grindrod Shipping Holdings (NASDAQ:GRIN) Has Us Very Interested

The Trend Of High Returns At Grindrod Shipping Holdings (NASDAQ:GRIN) Has Us Very Interested

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Amongst other things, we'll want to...

Jun 10
These 4 Measures Indicate That Grindrod Shipping Holdings (NASDAQ:GRIN) Is Using Debt Reasonably Well

These 4 Measures Indicate That Grindrod Shipping Holdings (NASDAQ:GRIN) Is Using Debt Reasonably Well

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

GRINUS ShippingUS Market
7D3.8%4.3%1.2%
1Y71.4%12.6%-11.6%

Return vs Industry: GRIN exceeded the US Shipping industry which returned 12.5% over the past year.

Return vs Market: GRIN exceeded the US Market which returned -13.5% over the past year.

Price Volatility

Is GRIN's price volatile compared to industry and market?
GRIN volatility
GRIN Average Weekly Movement9.8%
Shipping Industry Average Movement8.6%
Market Average Movement7.9%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.2%

Stable Share Price: GRIN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: GRIN's weekly volatility (10%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1910596Stephen William Griffithshttps://www.grinshipping.com

Grindrod Shipping Holdings Ltd., an international shipping company, owns, charters-in, and operates a fleet of dry bulk carriers and tankers worldwide. It operates a fleet of 32 vessels consisting of 24 owned dry bulk carriers and 7 long-term chartered-in dry bulk carriers that transport a range of bulk and breakbulk commodities, including ores, coal, grains, forestry products, steel products, and fertilizers. The company also operates one owned tanker, which carry petroleum products, such as petrol, diesel, jet fuel, and naptha, as well as heavy fuel oil; and low hazard chemical products comprising liquid bulk vegetable oils.

Grindrod Shipping Holdings Fundamentals Summary

How do Grindrod Shipping Holdings's earnings and revenue compare to its market cap?
GRIN fundamental statistics
Market CapUS$368.54m
Earnings (TTM)US$148.93m
Revenue (TTM)US$497.70m

2.5x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
GRIN income statement (TTM)
RevenueUS$497.70m
Cost of RevenueUS$229.20m
Gross ProfitUS$268.50m
Other ExpensesUS$119.57m
EarningsUS$148.93m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.86
Gross Margin53.95%
Net Profit Margin29.92%
Debt/Equity Ratio69.9%

How did GRIN perform over the long term?

See historical performance and comparison

Dividends

9.7%

Current Dividend Yield

18%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is GRIN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GRIN?

Other financial metrics that can be useful for relative valuation.

GRIN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA2.9x
PEG Ratio-0.08x

Price to Earnings Ratio vs Peers

How does GRIN's PE Ratio compare to its peers?

GRIN PE Ratio vs Peers
The above table shows the PE ratio for GRIN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average3.1x
CPLP Capital Product Partners
3x7.6%US$286.7m
SB Safe Bulkers
2.3x-6.1%US$460.9m
DSX Diana Shipping
4.1x-31.5%US$452.9m
PANL Pangaea Logistics Solutions
3.1x-7.3%US$255.3m
GRIN Grindrod Shipping Holdings
2.5x-30.0%US$368.5m

Price-To-Earnings vs Peers: GRIN is good value based on its Price-To-Earnings Ratio (2.5x) compared to the peer average (3.1x).


Price to Earnings Ratio vs Industry

How does GRIN's PE Ratio compare vs other companies in the US Shipping Industry?

Price-To-Earnings vs Industry: GRIN is good value based on its Price-To-Earnings Ratio (2.5x) compared to the US Shipping industry average (2.7x)


Price to Earnings Ratio vs Fair Ratio

What is GRIN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GRIN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio2.5x
Fair PE Ratio3.3x

Price-To-Earnings vs Fair Ratio: GRIN is good value based on its Price-To-Earnings Ratio (2.5x) compared to the estimated Fair Price-To-Earnings Ratio (3.3x).


Share Price vs Fair Value

What is the Fair Price of GRIN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GRIN ($19.44) is trading below our estimate of fair value ($110.74)

Significantly Below Fair Value: GRIN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.


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Future Growth

How is Grindrod Shipping Holdings forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-30.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GRIN's earnings are forecast to decline over the next 3 years (-30% per year).

Earnings vs Market: GRIN's earnings are forecast to decline over the next 3 years (-30% per year).

High Growth Earnings: GRIN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: GRIN's revenue is expected to decline over the next 3 years (-19.6% per year).

High Growth Revenue: GRIN's revenue is forecast to decline over the next 3 years (-19.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if GRIN's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Grindrod Shipping Holdings performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


69.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GRIN has high quality earnings.

Growing Profit Margin: GRIN became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: GRIN has become profitable over the past 5 years, growing earnings by 69.9% per year.

Accelerating Growth: GRIN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: GRIN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Shipping industry (297.3%).


Return on Equity

High ROE: GRIN's Return on Equity (46.3%) is considered outstanding.


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Financial Health

How is Grindrod Shipping Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: GRIN's short term assets ($172.5M) exceed its short term liabilities ($97.7M).

Long Term Liabilities: GRIN's short term assets ($172.5M) do not cover its long term liabilities ($216.9M).


Debt to Equity History and Analysis

Debt Level: GRIN's net debt to equity ratio (38.8%) is considered satisfactory.

Reducing Debt: GRIN's debt to equity ratio has increased from 39.9% to 69.9% over the past 5 years.

Debt Coverage: GRIN's debt is well covered by operating cash flow (91.3%).

Interest Coverage: GRIN's interest payments on its debt are well covered by EBIT (14x coverage).


Balance Sheet


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Dividend

What is Grindrod Shipping Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


9.67%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: GRIN's dividend (9.67%) is higher than the bottom 25% of dividend payers in the US market (1.51%).

High Dividend: GRIN's dividend (9.67%) is in the top 25% of dividend payers in the US market (4.09%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether GRIN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if GRIN's dividend payments are increasing as they only just started paying a dividend.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (18.4%), GRIN's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (16.3%), GRIN's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average board tenure


CEO

Stephen William Griffiths (61 yo)

4.75yrs

Tenure

Mr. Stephen William Griffiths serves as Interim Chief Executive Officer of Grindrod Shipping Holdings Ltd. since April 30, 200 and serves as its Chief Financial Officer and Executive Director since Novembe...


Board Members

Experienced Board: GRIN's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Grindrod Shipping Holdings Ltd.'s employee growth, exchange listings and data sources


Key Information

  • Name: Grindrod Shipping Holdings Ltd.
  • Ticker: GRIN
  • Exchange: NasdaqGS
  • Founded: 1910
  • Industry: Marine
  • Sector: Transportation
  • Implied Market Cap: US$368.544m
  • Shares outstanding: 18.96m
  • Website: https://www.grinshipping.com

Number of Employees


Location

  • Grindrod Shipping Holdings Ltd.
  • No. 03-01 Southpoint
  • 200 Cantonment Road
  • Singapore
  • 89763
  • Singapore

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/10 00:00
End of Day Share Price2022/08/10 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.