An Investment I like: Shipping company A.P. Moller – Maersk (AMKBY)

ap moller maersk

First off here are the specifics

Market Cap: $22.04 Billion USD
Dividend Yield: 1.66% a year
52 Week Range per share: $9.24 – $18.00 (your buying it cheap at $10.14 presently)
PE: roughly 7*, they are worth $22 billion and they profit $4.5 billion before tax and $3 billon after tax.

Why do I like this company?

1) Its owned by a billionaire John Fredriksen http://en.wikipedia.org/wiki/John_Fredriksen hes worth $11 billion US Dollars.  So your getting someone proven.
2) Your getting for a company that is half the average PE ratio, market PE is 16 average, your getting it for 7.  Their website says http://investor.maersk.com/estimates.cfm 15 but if you look in their interim report http://files.shareholder.com/downloads/ABEA-3GG91Y/3790933301x0x793512/16FE96BF-5938-441D-9DC6-6F79B6B88D61/Interim_Report_Q3_2014.pdf page 3 of 46 you  see they made $3 billion last year 2013.
3) Your getting paid to hold it a bit 1.66% a year
4) The shipping business has been out of favor for years look at the Baltic Dry Sea Index (the shipping cargo price indicator) http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm its substantially down from 2009, roughly 13,000 to 1,200 this is not  a typo.  So your buying the asset cheap, eventually its going to go up again.
5) They are not just in the cargo business of owning ships, they also own ports and have many lines such as
Maersk Line – Shipping oil and other goods
APM Terminals – A huge port business
Maersk Oil – Oil production

Basically your getting a beaten down asset because oil is at $55 dollars roughly a barrel.  If oil heads to $70 Maersk is going to be a $15 dollar stock at the least, that means your going to see an upside of 50% in probably 1 – 3 years which means your making 14% compounded a year which is good.

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 ap moller maersk

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