Value Investors seek opportunities in companies where the intrinsic value is less than their market capitalization. The bulk shipping industry should be no exception to this fundamental rule.
In this article, I compare the intrinsic value per share for three shipping companies, namely Baltic Trading Limited (BALT), Eagle Bulk Shipping (EGLE), and Genco Shipping & Trading Limited (GNK), relative to their stock price. All three companies specialize in the dry cargo segment of the industry.
Baltic Trading Limited owns a fleet of 9 vessels (with a total DWT capacity of 672,000 MT and average age per vessel of 2.7 years), and has a market capitalization of $69 million.
Eagle Bulk Shipping Inc. owns a fleet of 45 vessels (with a total DWT capacity 2,451,000 MT and average age per vessel of 5.3 years), and has a market capitalization of $52 million.
Genco Shipping & Trading Limited owns a fleet of 53 vessels (with a total DWT capacity of 3,812,000 MT and average age per vessel of 7.1 years), and has a market capitalization of $145 million. Genco is the parent company of Baltic Trading. It has a 25% interest in BALT, but due to a dual share structure, it exercises full ownership and managerial control.