Diana Shipping, Inc. (NYSE:DSX)

-47

I am a big fan of this stock. I ran through a number of shipping stocks, all of which were loaded down with debt and had poor equity and asset returns, as well as profit margins. But Diana shipping has solid margins, stopped its dividend as the global financial crisis was growing, built up a hoard of cash, and has weathered the storm well overall. Of course, it has taken a hit, but is in dramatically better shape than its competitors. If Diana can do this in a horrible market for shippers, it should be very successful when the inevitable global recovery/baltic dry index recovery takes place. A return of the $3.31 in dividends it paid in 2008 before it stopped its dividend is also an attractive prospect. DCIX is another stock to consider, as it shares the same management and was spun off from DSX, but it has a very short track record, so I opted to invest in DSX despite the dividend DCIX offers. A resolution of the Greek crisis might provide a boost to this stock.

Technical Monthly

Well, I gave my sister that middle name. We`ll see how she runs. All my fleets have been "down by the stern" as of late; except CPLP is several hundred $$$ in the green.

1/2 off - Shipping
Total Debt / Equity    0.30
Price Earnings    5.10
Price/Sales    2.33
Price/Book    0.56
Price/Cash Flow    3.10

Bulk shipping will return over the next 5 years.I think the maximum negative outlook is priced into these stocks.

The company which is most likely to survive. Tracker.

DSX is the one of the strongest companies in a struggling industry. However, increase bulk shipping (iron ore) that would accompany the recovery from the global economic slow down would allow this well positioned shipping company to expand its market share.

Cash on the sidelines ready for two larger ship purchases over the next year or so. Concerned about the near term contracts being less lucrative but an increase in ships means an increase is capacity and the stock is already near the bottom. Dramatic world wide economic downturn would be the only thing that would send this stock down more.

Goods will need to be shipped even in a down economy. Diana has more cash on hand than long term debt, and will be able to weather the current economic storm better than it's rivals that have a ton of debt. I would expect DSX to gain as the shock wears off, especially if they re-establish their dividend.

this ship has reached the bottom

leader in its field

Well run company with clean balance sheet. Over inventory of shipping vessels will lead to loss of competition and ultimately rise of the best.

All of these shipping companies are value traps. They look cheap based on traditional valuation methods (P/E ratios, P/B, etc...). However, when you look at their cash flow we see something completely different. Companies like this are and always will be very capital intensive. In fact, the capital expenditures (required maintenance of ships) are so high that most of the time these companies can’t earn enough cash to cover them. Now, I don't know about you, but this doesn't sound like a company I'd feel safe investing in. This company is slowly taking on more debt, that's the only way it’s able to cover its increasing costs. In the long run a business like this will surely fail and its stock price will continue its steady decline.

For the long haul.

Will rebound... down with BDI

Falling Wedge-Bullish Signal

Great balance sheet. Buying ships on the cheap. Will pick up market share no matter what, but it may be a few years till the value is reflected in the stock price.

value