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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