Big Board Trading

[MiamiGent]

SFL closed -22.66% @ 10.68, 6.27x's 90dav
Sets new 52 wk low.

Hi folks, back and looking over my play (paper) today. I set a S.O. @ 11.77 which did not execute.

So, what's going on with SFL?
Let's look at the chart, first:
http://stockcharts.com/h-sc/ui?s=sfl

Well, I guess the 800 lb elephant is that they report tomorrow, Pre-Market.

SFL is in the ocean vessal leasing biz, and the industry has been hit by overcapacity and, in particullar, slowing oil shipments/consumption.
But down 23%? We'd think the BOD were going to arrested tomorrow, Pre-Market!
Well, a little digging reveals SFL, while stand alone, has a profit sharing agreement with Frontline Shipping (FRO), its former parent. Yup, ddt and I were sort of in the same confounding play, today! lol. But it biz with FRO reportedly is no more than 20% of its overall biz, and the other 80% is in some red hot areas like drilling rigs.
FRO just announced they will be out of do-rae-me by the first of '12 if biz doesn't p/u. We'll- it is picking up, somewhat.
But there is no justification for SFL to be dragged 5.15% lower today than its 52 week low. It was a "sympathy move".
I'm holding SFL and am looking for some sense tomorrow following the Pre-Market earnings report.

Here's what Motley Fool has to say about Frontline, and how it's affecting its industry:

Frontline Investors: Why Shares Are Tanking 40%
By David Williamson | More Articles
November 22, 2011

On a day when the Dow Jones Industrial Average (INDEX: ^DJI ) is down less than a percentage point, shares of oil tanker company Frontline (NYSE: FRO ) have been eviscerated by nearly half. The 40% collapse, brought on by a Financial Times article claiming a restructuring is unavoidable, has caught other industry mates in its wake. Both Overseas Shipholding Group (NYSE: OSG ) and Ship Finance International (NYSE: SFL ) have sunk more than 15% on heavy trading volume. Competitor Teekay Tankers (NYSE: TNK ) is down 5%, possibly because investors are wary about its own fiscal situation, even though it should benefit if Frontline stumbles.

Essentially, Frontline, beset by a $136 million third-quarter loss, is in danger of breaching its debt covenants early next year. The company's $242 million market cap and $173 million cash on hand is dwarfed by $2.7 billion in debt. Even worse, poor business conditions have exacerbated the problem. According to the Financial Times, a glut of vessels has caused spot rates to be less than half what Frontline needs to break even.

Legendary CEO John Fredricksen still owns roughly 40% of Frontline, so expect him to be aggressive in protecting his investment. Although his attention may be split, I wouldn't expect a refinancing at Frontline to disrupt any of his other multibillion-dollar businesses, like, say, SeaDrill (NYSE: SDRL ) and its tasty 9% dividend yield. My optimism doesn't extend to the sustainability of Frontline's 1.4% yield, though.

The sheer number of newbuilds coming online is a pox on all shippers, not just tankers. Fellow Fool Chris Barker prophetically warned about this approaching tsunami years ago. He cited it as a chief reason he favored dry bulk shippers with strong cash positions over those encumbered by high debt loads like DryShips (Nasdaq: DRYS ) .

At the end of the day, I expect Frontline to survive, and from this lower share price, potentially thrive. The dividend might go away, and the ride will get rougher for shareholders before they see calm. But Frontline historically is well-run and negative gross margins won't plague the industry forever. I wouldn't suggest running out and buying shares, but Frontline certainly deserves careful watching.

And another commentary..

Shares of SFL Now Oversold
Energy Stock Channel

In trading on Tuesday, shares of Ship Finance International Ltd (NYSE: SFL) entered into oversold territory, changing hands as low as $10.665 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of Ship Finance International Ltd, the RSI reading has hit 27.9 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 49.3, the RSI of WTI Crude Oil is at 60.9, and the RSI of Henry Hub Natural Gas is presently 44.4.

A bullish investor could look at SFL’s 27.9 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.

Looking at a chart of one year performance (below), SFL’s low point in its 52 week range is $10.665 per share, with $23.07 as the 52 week high point — that compares with a last trade of $10.73. Ship Finance International Ltd shares are currently trading down about 22.3% on the day.


According to the ETF Finder at ETF Channel, SFL makes up 3.91% of the Guggenheim Shipping ETF (AMEX: SEA) which is trading lower by about 3% on the day Tuesday.

SFL operates in the Oil & Gas Equipment & Services sector, among companies like Kayne Anderson MLP Investment Co (NYSE: KYN) which is down about 1.7% today, and Kayne Anderson MLP Investment Co (KYNPRD).

Here's SFL's website:

http://www.shipfinance.bm/

MG- defending his paper positions, lol!