Thursday, December 15, 2011

LOGN3 - Log-in Logística

Here goes my main notes about Log-in:
  • Cash flow from operations since 1Q2010 is BRL 73,7 mi. Since receivables increased a lot, total cash flow generated is under BRL 20 mi (less than BRL 3 mi per quarter).
  • Cost of debt is very low. Almost 3/4 of it is TJLP + 2.5%.
  • According to the company, cost of TEU per day of own boat is 80% less than chartered boat (Cost TEU/day of BRL 6.00 x BRL 29.00).
  • One boat just begun (Jacaranda) and other will begin (Jatoba) commercial operation soon.
So, if you believe company is pre-operational (except for TVV Vilha Velha) and the new boats will reduce costs and increase FCF, it may be a good pick. 

But bear in mind that today it doesn't generate cash and doesn't pay dividends, so you'll have to make a bet. What is yours?

Under no circumstances does any article or opinion posted on this blog represents any kind of advice, suggestion or recommendation to buy or sell any security. We also do not guarantee the accuracy of any information contained in any posting on this blog.

Related Posts

7 comments:

cessna said...

The past is not a good guide for Log-In. It's a changing company, for the better I hope. They say that 2011 was the transition period and 2012-2013 will be the harvest time. If that's true, it's time to buy.
As you said, it's a bet, not a sure thing.
But Fama had 16,37% in set/11, for a much higher price than the closing price last friday.

sid said...

The simple fact that Fama has a huge position in LOGN doesn't seduces me. It has a bigger share in MDIA and a I don't think it's cheap (it's an excelent company, no doubt, but isn't cheap).
Log-In belevies that after 2014, when all boats will be in operation, volume will increase 70%, besides huge costs decreases.
Anyway, I think more research is necessary.

cessna said...

The problem is: i don't know how to value a business based on the future prospects. I just take the average returns in the past fes years and project a modest growth rate for the future.

cessna said...

Maybe in 2012 log-in will show some results that justify the price. I calculated an annual FCF of Bout 40 millions Usd as the minimum fcf to buy logn3 at friday's closing price.

sid said...

Vale estuda vender participação na empresa de cabotagem Log-In

sid said...

I true believe in the potential growth of Log-In.
However, I can't get a clue if that growth will turn out to be profitable.
So I'm not going to make any move until I see 4Q11 release and analyse Jaracanda boat performance.

cessna said...

Valor: Armadores tem 246 porta-conteineres parados nos portos

This is the risk for the shipping business. The capacity buildup usually occurs after the market passed its peak.

Post a Comment

We encourage your feedback and we will take your comments into serious consideration. However, you must be warned that any comment that does not follow the blog philosophy (Value Investing and Behavioural Finance) will be promptly removed.