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Teacherman1 (62.19)

They are giving it away - Time to help yourself to some?

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August 04, 2011 – Comments (6) | RELATED TICKERS: DCIX , DSX

Here is a link to the newsletter from DCIX showing their balance sheet as of June 31, 2011.

http://www.dcontainerships.com   Go here and click on News.

This is unaudited, but probably fairly accurate.

This is a "spin off" from DSX and even though a completely "stand alone" company, it is run by the same people running DSX, which is one of the most conservative shippers in the bulk sector.

They reported yesterday before the market opened, and showed a loss for Q2 and for 1st half, but that is somewhat misleading, since there were a lot of things going on during Q2, including the purchase of 3 used vessels to go with the 2 new builds they had, so the results are basically for the 2 new builds.

They issued new shares, and now have just over 23m outstanding. Based on the Shareholders equity shown on the balance sheet, the book value as of June 31, was just under $9.00 per share.

They had a current ratio of over 15 to 1, and a debt to worth ratio of almost 1 to 70.

They showed cash of $46M, 5 vessels with a book value of 161M, and basically no debt.

Even though they showed a small loss for the quarter (depreciation and financing during the quarter) of about $600K, they still authorized a dividend of $.03 per share.

They advised in an earlier statement that the August dividend would not be realistic for determining forward annualized dividends. Their dividends will be variable, and based on 70% of available cash.

Since they dropped over 50% after announcing the new offering earlier this year, many previous share holders got a "bad taste" in their mouths, so the trading activity has been mostly "day traders" playing among themselves with less than 1% of the outstanding shares.

With this panic market going on, shippers currently viewed as "dog poop", and the announcement of a loss for the quarter and half year, the bottom has fallen out of it.

If you are looking for a great value, don't panic easily, and feel comfortable after doing your own DD, this might just be one of the "bright spots" available among the shippers.

I currently own this stock ( at an even higher price than yesterdays close ) so will add if it keeps going down.

As always, the above is JMO and worth exactly what I am charging for it.

6 Comments – Post Your Own

#1) On August 04, 2011 at 6:41 PM, bcvz (53.81) wrote:

Are they actually trading below cash value?  Hmmm, interesting....

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#2) On August 04, 2011 at 10:27 PM, Teacherman1 (62.19) wrote:

Not cash value, but book value. They had $2.00 per share in cash as of June 31, and a book value of just under $9.00, with no debt, and will pay a variable dividend.

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#3) On August 05, 2011 at 8:31 PM, Bays (30.76) wrote:

The chart looks typical of a spin off!  Investors dumping shares that probably represent a tiny percentage of their portfolio (because of the spin off from DSX).  Mutual fund may not be able to hold them too because of the market cap. 

Lots of non-fundamental reasons for the dumping for sure...

This one could be an easy and quick double from here.  

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#4) On October 29, 2011 at 2:30 PM, shamapant (80.71) wrote:

QUESTION!-i was wondering if people were selling b/c of market cap too, but I realized that post spinoff DSX's market cap reduced by a factor of almost 5...why would DSX spin off DCIX if it knew it would dilute shareholder value, instead wouldn't it have been better to get a loan or something for DCIX to become more profitable? I just hate uncertainty and I want to get all the facts before I invest

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#5) On October 29, 2011 at 4:33 PM, shamapant (80.71) wrote:

^nevermind, Google Financ's market cap for DSX comes from DCIX's share amounts, which is innacurate. 

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#6) On November 03, 2011 at 3:02 PM, Teacherman1 (62.19) wrote:

Did you get your answer shamapant?

I don't go back to look at blogs all that much, so just saw this today.

Don't get to concerned if DCIX doesn't just "shoot up" after they do their Q3 release.

It will go up, and it will pay a good dividend, but depending on what they have done over the last 3 months, it is hard to say exactly what it will be right now.

You also need to take into account that there is not a lot of information out there about them.

You can't even get current, accurate information about their Q2 results without going to their web site, or digging really deep on Yahoo and Google financial.

People also think all shipping companies are Greek, and that what happens with Greece will have a huge negative effect on them.

Remember, it is a fundamentally strong company, and in the end, this will win out over the "market mood swings".

Also remember that they are well set up for a couple of years, after that, you need to see what they have done, and if you still like them for an even longer hold.

Hope this helps.

Good luck.

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