This will be a brief post about a company that I think could be the cheapest in the market
There are a lot of discussion if shiping rates will stay high or not in the middle and long term.
But please, just see the ratios at which zim is trading and you tell me. Keep reading, please
See the Excel I attached
PER (TTM; Trailing 12 months) = 2,87 and also gross margin growing consistently
But everybody knows that shiping rates were a lot higher in Q1 & Q2 2021 than Q3 & Q4 2020.
So, clearly this is not a precise measurement. Financials statements show us the past, you should predict the future
Lets see what happened during 2021
See the freight prices chart I attached
All of you can see that Q3 & Q4 from 2021 are a lot higher than Q1 & Q2 2021. And I think is very very difficult to see a decrease in shiping rates before Christmans and New Eyer consumer frenzy
So, Q3 and Q4 net income will be higher than Q2
How much is the projected PER if we extend Q2 net income for Q3 and Q4? (and please, remember I'm saying Q3 and Q4 will be a lot higher than Q2, but do the math to see what im trying to expose)
PER projected = 1,76
Taking into account that we agreed Q3 and Q4 will be better than the last ones, I propose to do a better projection, where Q3 will be Q2x1,5. And Q4 will be the same as Q3
why x1,5? Is it clear that freight quotation in Q2 is below 5000, and Q3 average is 7500 (7500/5000 = 1,5)
PER projected = 1,37
...The last one...
We can clearly see how Q4 freights start above Q3 maximum levels, right? Around 10k per 40ft container
And trust me, freights are not going to decrease before Christmas.
The average rate for q3 is $7500 per container and will be $10.000 for Q4. That's a +33%
So, how much is going to be the PER if we use Q1, Q2, Q3 as Q2x1,5 and Q4 as Q3x1,33
PER projected = 1,25
Can you see that no body should be worried about the freight prices in 2022? Even if they fall 50%, ZIM could be still one of the cheapest companies in the market. And im not considering the increase in gross margin either
Which are my predictions for freight rates in 2022?
I don't think they will remain at these levels for all 2022, but I'm not projecting a big decrease. Mostly because there will not be any vessels delivered until 2022. First of them will be starting to circulate in 2023. So, supply won't increase.
The only fact that could slow down $ZIM performance is the stake that $DB and $DAC have on it. $DB is already 1Bilion profit from his convertible debt bought it in 2016 in ZIM when was in financial troubles.
I know that is not easy to buy a company that already increase 400%. But please, do the maths! And remember that freight rates are 900% above 2020 price
I'm really long here with 2000 shares
FYI: ZIM EARNINGS REPORT ON NOVEMBER 17TH