NOL

NOL: Reported continued sluggish operating performance for 4 wks from 7May – 3Jun 11 (Period 5). For the four wks, container shipping vol increased 7% yoy but was down 1.2% vs period 4 while average revenue per FEU fell 8% yoy and down 0.02% vs period 4. Increase in vol due to higher vol carried on the Intra-Asia and Asia-Europe trade lanes while decline in average revenue per FEU was due to lower rates in the Asia-EU trade lane…..

YTD, container shipping vol has increased 9% while average revenue per FEU fell by 1% yoy. We note that despite weak operating performance, grp has in recent days announced orders for 10, 14,000 TEU ships with Hyundai, which will be the largest vessels in its fleet. At current price, valuation appears compelling with grp trading at 0.94x P/B vs historical average of 1.2x. Street has very mixed views on stock, with a mean TP of $1.81.