Wednesday, March 13, 2013

Diana Shipping Inc. - Earnings Estimate For 2012 Q4

For the quarter ended December 31st, 2012, I estimate that Diana Shipping Inc. (NYSE: DSX) generated basic earnings per common share of $0.07 on net income of $5,500,000. I estimate that TCE Revenues were $46,400,000 and the average TCE rate was $17,800.

As of December 31st, 2012, I estimate that book capitalization was $1.730 billion including shareholders’ equity of $1.270 billion, and debt outstanding of $460 million. Its debt to capitalization ratio stood at 26.7%. I also estimate that DSX had approximately $452 million cash on hand as of the end of the quarter.

Following the acquisition of M/V Polymnia in Nov 2012, and M/V Myrto & M/V Maia in Jan & Feb 2013, the company currently owns a fleet of 32 dry cargo vessels (consisting of 17 panamax size vessels, two kamsarmax vessels, three post-panamax vessels, and 10 cape size vessels), with a total DWT carrying capacity of 3,541,000 MT, and an average age per vessel of 6.7 years.

The company has on order two panamax vessels, scheduled for delivery in the fourth quarter of 2013, at a contract price of $29 million per vessel. Diana Shipping also has a 10.4% interest in Diana Containerships.

Monday, March 11, 2013

Buy Safe Bulkers: Smart Management With Skin In The Game

Safe Bulkers (SB), a small-cap dry cargo shipping company, is a rare gem for an investor looking to add exposure in this sector. I like the company a lot for its modern fleet, smart hands-on management team, and above all because its CEO has skin in the game. I also believe that the current valuation level (SB closed Wednesday at $3.93 per share) is an excellent point for a new entry or to add to an existing position.

Safe Bulkers is perfectly positioned to navigate through another challenging year for the dry cargo shipping industry. It is a low-cost provider of first-class transportation services, it has the capacity to generate operating surpluses from a balanced mix of fixed-rate and spot market charters, and is well positioned to meet its capital requirements for year 2013 while maintaining a quarterly dividend of $0.05 per share. At a current dividend yield of over 5%, it represents a safe bet on a market recovery, and I am a buyer at this price level.

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