I have been hit quite hard by the recent covid-19 tumble. The reason is my overweight in oil and shipping stocks. Wilh Wilhelmsen is at ATL, and ocy at 5 year low. BW offshore is halved in the last 6 months, and BW Energy has fallen from the ipo of 24,40 to around 17. However I managed to sell Treasure at 15, and Stolt Nielsen at 123. Today I bought back SNI for 102. So not all bad, but not good. Today I bought more Hydro and Ocean Yield, in addition to Stolt Nielsen. I’m not at all worried about BW Energy, as I believe I know the case well. There is a lot more oil coming online soon, with a much lower lift cost. It is a company growing fast, and will produce 5 times as much oil in late 2022 early 2023 as today. So here I will keep buying as long as it is below the Ipo price.
Ocean Yield has a higher risk. The counterparts are supposed to be solid, but if a lot of the factories in China and Kora are closed, this will affect earnings. But I think the management know what they are doing, and have averaged down.
Hydro’s problems in Brazil are more or less over. Their cost saving programs are moving forward, and the share price is nearing a 7 year low. Last year had several one off situations like the cyber attack. 2020 will probably be a better year for Hydro regarding earnings. The dividend proposed by the board is 1,25 nok , which is considered to be the “floor”. With increased earnings next year, you can now buy a solid company at a price where it yields 4,7% as a minimum.
In addition to my existing holdings, I am keeping an eye on stable, non cyclical businesses, that takes a tumble along with the rest of the market.