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Teacherman1 (41.39)

Don't Miss Out on this Floating Goldmine

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October 02, 2011 – Comments (4) | RELATED TICKERS: TEU , DCIX

Just a reminder to those who picked/invested in TEU (Boxships) to not overlook DCIX.

As I stated in a previous blog, this one is as good, and may be even better than TEU, especially right now because their shares have been beaten down.

They will not be paying as high a dividend as TEU, because they are more conservatively run, but their balance sheet is even stronger.

The writer of the Seeking Alpha article about TEU (which I linked to in my last blog), seems to have changed his mind about DCIX, which he "dismissed" in that article.

His new analysis appears to be very close to what I posted in my earlier blog about DCIX.

Here is a link to the "upgraded" Seeking Alpha 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

As always, do your own DD, but don't let the "grass grow under your feet".

When both of these companies report their Q3 earnings and dividends, it is likely that even in this "schitzo" market, they will both "shoot up".

Even if they were to stay where they are (an unlikely occurance in my opinion), they would both be extremely good dividend plays at their current prices.

JMO and worth exactly what I am charging for it.

p.s. PRGN and DSX may get an upside benefit from their stock ownership positions in these two containership companies, so you might want to take a small position in them while their prices are beaten down.

4 Comments – Post Your Own

#1) On October 05, 2011 at 12:25 PM, rubicondan (< 20) wrote:

Fears of global container shipping slowdown appear very overdone in DCIX. With over $2 per share in cash, the company could dry dock its five ships and sell them into the secondhand market and return over $7.50 to shareholders. On an operating level, their charters are locked in until 2013 and the company will pay out 70% of cashflow quarterly to shareholders. I am long this one.

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#2) On November 04, 2011 at 1:11 PM, broadwaynewyork (< 20) wrote:

Teacherman1, any thoughts as to why DCIX seems to be lagging TEU's recent share price appreciation?

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#3) On November 06, 2011 at 1:32 PM, Teacherman1 (41.39) wrote:

I suspect it has to do with DCIX being more conservative than TEU in "projecting" what they are planning to do.

DCIX paid only $0.03 in dividend for the 2nd Q, while TEU paid $0.15 and stated that it expected to pay $0.30 for the third quarter.

While DCIX stated that investors should wait until the Q3 report to get a better "feel" for what their anualized dividend yield would be, they did not give an actual number.

There is more trading volume for TEU because there are fewer shares and less float.

There is also a "residual bad taste" in the mouths of some earlier DCIX investors, when it was "spun off" at a valuation of about $12.00, and promptly dropped. This led to a lot of short selling.

Some investors don't do a lot of digging in the "small cap" sector, and just look at the current dividend yield, with TEU showing a much higher one.

TEU is also reporting earlier than DCIX, so I think investors want to get in prior to the "release" and dividend announcement. Not sure how many will hold after the ex-dividend date.

I believe that DCIX has a lot more room for appreciation left in it than TEU does, and look at this "depressed" price as a great buying opportunity.

I personally own more than twice as much DCIX as TEU.

I still like both for at least the next couple of years, but see TEU more as a "dividend play", with some appreciation in price, and DCIX as a lesser "dividend play" with more price appreciation.

I don't think you should "read" anything into the fact that DCIX is not appreciating as quickly as TEU. While it is not performing as well as TEU right now, it is also not as volitile.

JMO and worth exactly what I am charging for it.

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#4) On November 07, 2011 at 11:03 AM, broadwaynewyork (< 20) wrote:

Thanks, I appreciate your thoughts.

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