(KBHM) John Fredriksen's Golden Ocean Group (GOGL) has been hammered in the last week, dropping a whole ten percent on the back of a bad bulk market. However, the Baltic Dry Index (BDIY) was up a few points on China's ever increasing iron ore imports. Baltic Dry ended Monday up 1.58% and is now at 837 points. Both DNB Markets and Arctic Securities now have a BUY recommendation on the stock.
Although one should never listen to analysts, Golden Ocean has proved to be a dividend friendly company, with an excellent management team led by Herman Billung, and backed by John Fredriksen. GOGL ended trading today at NOK 4.96 up 3.77%.
While there may be some optimism and positivity around GOGL, Fredriksen's drilling company Seadrill (SDRL) just got downgraded from BUY to HOLD by Sociéte Générale today. With that said, what do the French know about shipping?
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Another piece of company news emerged today, SDRL signed a contract with Saudi Aramco. It is a three year deal for the jack-up rig "West Callisto", with a one-year option. According to the press release this deal is worth approximately $164 million, plus a $20 million mobilisation bonus. The start date is set for September, 2012.
Fredriksen recently sold approximately 24 million SDRL shares to "increase firepower for shipping acquisitions". It is rumoured he is gearing up for his largest shipping investment in more than 12 years. Between 1996 and 2001 he purchased 80 vessels totalling $4.6 billion. He will probably be aiming to enter new shipping areas, such as oil-product tankers.
Can we draw any conclusion from Fredriksen's actions? Does he not like offshore, or does he simply prefer shipping at this moment in time? Is he telling the market it might be time to buy big?
