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Teacherman1 (57.90)

Another Containership Stock, Containing Possible Treasure

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6

September 20, 2011 – Comments (5) | RELATED TICKERS: TEU , DCIX

This is a spin off container ship company from PRGN, and the IPO was in mid-April.

They currently have 7 ships, all under term charters running from August of 2012, to 2016. There are 3-2010 builds, 2-2007 builds, 1-2006 build, and 1-2004 build, so the fleet is on the average only 3.6 yrs old. One of these ships was purchased in August, after the Q2 results, and they plan to continue adding to the fleet as opportunities arise.

The average daily rate is $23,828, and the average daily cost to operate (including G & A ) is $8,333.

For the shortened Q2 ending June 30, 2011, they had revenue of $7.2M, and income of $2.3M, for an average of $0.16 per share on a weighted average of approx. 14M shares. Their EBITDA for this period was $4.6M.

They bought 2 of the ships from PRGN for cash and stock. It might be worth taking a look at the end of the third quarter to see what this does for PRGN's bottom line, since they received $0.5M in dividends for the shares they received, and if the $0.30 expected for Q3 holds up, PRGN should see about $4M a year from TEU.

They paid a dividend of $0.15 per share for Q2, and expect to pay $0.30 for Q3.

It is their intention to pay out 100% of available cash each quarter. The same people who run PRGN run this company, and since they receive good dividends, they have an incentive to keep the "cow giving milk".

Their "rough" balance sheet at the end of Q2, shows assets of $346M, of which $11M was in cash, and $321M in ships. They showed LTD of $149M, and equity of $178M, or a little over $12 per share of book value.

When they finish up Q3, there should be a rise in the stock price, because at today's price ( $7.70 ) , they would be yielding about 14%, if they pay out $0.30 per share.

This one is similar to DCIX, but the balance sheet, while strong, is not as strong as for DCIX.

I think both of these are good longer term investments. Do your own DD by going to their web site, and for a good write up on TEU, you might want to look at the Seeking Alpha article.

I think Seeking Alpha overlooked how strong DCIX will be going forward, but we are each entitled to our own opinions.

JMO and worth exactly what I am charging for it.

If you see any "bloopers", please feel free to point them out.

I am long on both DCIX and TEU.

5 Comments – Post Your Own

#1) On September 20, 2011 at 4:56 PM, Teacherman1 (57.90) wrote:

I thought I posted a link to the Seeking Alpha article, but it doesn't seem to be here. Excuse me if it pops up twice.

http://seekingalpha.com/article/289775-box-ships-high-yield-with-instant-two-bagger-potential?source=email_investing_income

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#2) On September 21, 2011 at 2:10 AM, awallejr (83.91) wrote:

Poison, stay away.  I wouldn't touch another company run by this CEO.  He bs'd on PRGN why would I trust him here?

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#3) On September 21, 2011 at 9:45 AM, Teacherman1 (57.90) wrote:

Maybe because it is in his interest for TEU to be successful?

What is it that HE did to PRGN?

Used to own PRGN but haven't for quite some time, so not sure what you are talking about.

I'm not planning to hold for years, but for long enough to get some upside appreciation, and to collect some dividends.

Do you trust the management of DCIX (DSX)?

Perhaps that would be a better choice.

It also has potential for upside stock appreciation and a pretty good dividend.

It certainly has (or at least had at the end of Q2), a much stronger balance sheet.

Anyone who is considering buying in needs to do their own DD, but I am willing to take advantage of the opportunity.

I'm not betting the ranch, but enough to make it worthwhile if it works out like I believe it will.

Just posting this for those who may want to get in on something before it "likely" pops.

JMO and worth exactly what I am charging for it.

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#4) On October 02, 2011 at 11:56 AM, Teacherman1 (57.90) wrote:

It looks like the writer of the Seeking Alpha article on TEU, who was not as impressed with DCIX, has changed his mind.

Here is a link to his "upgraded"article.

http://us.rd.yahoo.com/finance/external/pssa/SIG=13lgq20a3/*http%3A//seekingalpha.com/article/297066-diana-containerships-strong-balance-sheet-makes-this-a-dividend-value-play?source=yahoo

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#5) On November 12, 2011 at 3:56 PM, Teacherman1 (57.90) wrote:

Announced earnings and a $0.30 dividend on or about Nov.29 to holders of record as of Nov. 21.

You will have the first 3 or 4 days of next week to buy if you are interested.

It was up to $11.04 after hours, and even at that price it had an annualized yield of almost 11%.

It is reasonable to assume that investors would still be interested at a yield of 7% to 8%, which would give it a reasonable price of $15 to $17 per share.

I'm not saying it will go there, but it will likely rise more next week.

For those of you who bought "cheaply", there is an opportunity to sell half, or less of your position, and hold the balance for future dividends with the equivalent of a zero cost basis.

JMO and worth exactly what I am charging for it.

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