WOW !! What a set of results

Hi Rivaldo.

I've held FSJ in the past but however I look at it in the current climate CKN just looks a better play to me. Lets assume FSJ do 28p eps and CKN 50p eps this year.

Earnings record over 5 years:

FSJ = 10.3p, 37.9p, 9.64p, 16.6p, 22.27p, 28pE 22%pa compound over 5 years
CKN = 3.5p, 4.1p, 25.24p, 34.52p, 18.34p, 50pE 70%pa compound over 5 years
BMS = 29.5p, 19.9p, 17.5p, 12.2p, 14.1p, 15.5pE No earnings growth at all

Year on year eps growth for FSJ will be around 25%, CKN will be 170%. Even if you reckoned on CKN having a rough year last year and you took the growth in earnings compound from 2 years ago at 34.5p that's still 20% compound if you'd held through a rough year. BMS is just a shocker.

FSJ - forecast PE 9.5 (based on 28p eps)
CKN - forecast PE 10 (based on 50p eps)
BMS - forecast PE 15.6 (based on 15.5p eps)

FSJ - forecast divi = 6.5p (2.4%)
CKN forecast divi = 15.85p (3.1%)
BMS forecast divi = 12p (5%)

When you look at all the numbers I just can't see an argument for buying FSJ over CKN. Yes, recent years FSJ has had steadier earnings and I agree it could trade on a PE of 13-15 if it rates on a support service group rating, which it may do if earning steadily grow at 20%+. But to the same token I can see CKN trading on a rating of 15 like BMS simply because it has greater potential growth, much better long term growth over 5 years, pays a better divi too. If CKN do 50p eps this year then next year could be well in excess of 70p eps. Look at how high shipping prices have gone since Jan last year - 2004 is going to start from a much, much higher base, easily possible 40p eps in H1 next year or more. For this sort of growth if investors only paid a PE similar to BMS you will see these CKN double in 12 months, possibly sooner. While FSJ could see decent growth I can't see them having the potential or the exposure to all the worldwide shipping demand that CKN has that would mean FSJ could double imo.

As for BMS it seems city investors are paying a PE 50% higher than CKN just to get an extra 2% yield - outragous - I'd be on the phone to any fund manager of a fund I owned if he was in BMS rather than CKN to ask why myself.

Another point is the FTSE Small Cap Index. FSJ is already in but CKN will get a boost as they inevitably enter soon. HRN just entered with a market cap around £80m, right were CKN's market cap is now. Far greater fund exposure in the Small Cap Index than the Fledgling.

CKN - far more investors watching and aware of this stock too now - can't imagine anything other than solid buying as the results approach in March - can see CKN really motoring in Feb as they did before the interims.

I'm sure FSJ could have decent upside Rivaldo, just can't see an argument for buying them over CKN.

Remember the Chairman saying this in July:

"At the Company's AGM it was reported that all areas of the Company had traded
well for the first four months of the current year. In particular the Chairman
highlighted the strength of freight rates in the tanker market and the demand
being generated by strong industrial growth in the Far East.

These market trends have continued. Consequently the Directors expect the
interim results for the first six months of 2003 to show a marked increase over
2002 and the results for the full year are likely to be significantly ahead of
market expectations."

Shipping demand has just rocketed since then.

Happy New Year - I'm sure it will be if you're holding these :-)

CR