The Flea Wagging the Dog - DCIX
March 15, 2012
– Comments (5) |
RELATED TICKERS: DCIX
It is interesting to see that right now, less than one quarter of one percent of the outstanding shares have actually driven DCIX back down to an attractive buying price.
I will admit that they are hard to understand right now, with the addition of new vessels, and draw down of an RBS line of credit ot over $90M, but they still have what is probably the strongest balance sheet in the shipping industry.
Now that they have posted an SEC filing showing a potential $250M offering, either as new common shares, prefered shares, warrants, etc, without really providing a lot of information on what they are planning to do with it, it gets even more confusing.
I was going to wait until I got more information and could lay it out a little clearer before posting a new blog, but I thought a timely "heads up" on a new buying (or adding) price might be of some interest to investors.
At the most recent price, their current $0.60 annualized dividend is yielding just under 10%, and they did declare they were going to continue to pay that out at a 70% of available cash rate.
They also indicated in the notes to their filing, that their plans going forward were to continue to add additional ships to their fleet (at profitable rates), so as to increase value to share holders via their dividends.
Remember, that the draw down on their credit line was to add vessels to increase earnings, cash flow and dividends.
It's not that they used the funds to "throw themselves a party", but to buy more profitable assets.
I still see this as a good intermediate term investment (at least for the next 18-24 months), and probably much longer, with a current dividend yield of about 10% and a potential share price appreciation in the 30% to 50% range.
JMO and worth exactly what I am charging for it.
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