Box Ships (NYSE:TEU)

Good investment in my perspective, with good dividends, the pay out ratio now is more reasonable than in the past year, I think that in long term, the industry have potential, but right now is somewhat risky this industry in my opinion is dependable of GDP, in the way that the GDP improve the industry must improve together with it, and vice verse if the GDP get worst the industry will suffer and not only of less growth demand also of high cost of operation. (Inflation because the deflation of cost take time)

This industry is very competitive, the are a lot of competitors, in severe problems, this is of advantage for the companies that keep profitable, but here in short term exists right now more risks than rewards, risks like for example of how will react the investors when see their yield reduced, to less of the half. Risk of a recession in the economies, with I think will happen very easy when the sequester and the new taxes start to feel in the business via less profit margins.

By another part the stocks is near of support around $4.00 by second time, so may be the support hold a second time. My strategy is very simple is buy some at this price and in the case the stock plunge below support start to accumulate shares with more aggressiveness for long term, actual yield at 11% I think is enough for compensate risks in the long term in the way the stock continue in downtrend the yield will raise therefore the risk of enter is more compensated, better reward. The second point to accept the risks if at a yield of 16% annually ( around $3.00 zone) 11% is good for start the first position in my perspective. (Long term investments require patience)

They have a very nice dividend and the stock appears to be undervalues.

Dividend

http://wiki.fool.com/The_Graham_Number
Formula: Fair value=Sqrt(22.5*EPS*BV) I expanded it a little by also using EPS Normalized and Tangible BV

Gonna have a varying range here.
Looking at Gurufocus I find EPS=$0.2 Tangible Book=$10.8
Yahoo Finance Diluted EPS=$0.88 Book Value=$13.57
Fool CAPS Stats page EPS=$0.56 Book Value=$10.79
Scottrade data current as of Sep30;
EPS=$0.76 Book Value=$13.63
Normalized EPS=$0.83 Tangible Book=$13.63

The Fool's stats give me a median GNV: $11.66

Using all that above data I get a total possible
Graham Number Valuation Range for TEU: $6.97 to $15.95

Still...
As of the last close TEU was $5.10
with current divi yield 17.25% and even though the payout ratio is high for my taste at 207% so the divi may not be sustainable,
I'm picking TEU to outperform.
I'm also of the belief that container traffic will ramp up over the next year and TEU will benefit.

All this is JMHO and worth exactly what you paid for it. Nada.

Box Ships is a lessor of midsize container ships. It currently has nine ships in its fleet. Most of its leases are for multiple years, assuring its cash flow. Its business plan is to lease them to ship operators on essentially triple net leases--think of a building owner renting office space with the tenant paying not only rent, but utilities, maintenance, taxes, etc. Box Ships calculates its lease rates to cover its ship acquisition debt and cost of money, plus its desired rate of return. Since it acquired its first seven ships at favorable costs and its next two ships with proceeds of a secondary equity offering, it appears quite likely that it can keep its fleet leased at near capacity. The company's CEO projected that it will be able to continue its dividend distribution at a level of at least $.88 to $1.00 for the next couple of years. At a current price of $5.10 per share, that is a dividend rate of at least 17.3%. Are there risks to its business model? Sure. It's a Greek based company, but most of its banking relationships are with US and European banks. It recently did the secondary offering to raise cash for the two new box ships acquisition at a discount to its original IPO. The shipping industry, generally, is in a slump, but the midsize container ship segment is not overbuilt and appears stable. The company does careful underwriting of the financial condition of its lessees. Given all that, the risks to execution of its business model appear reasonable--and you are certainly being paid well at 17% for taking them. I think the reason the dividend is so high is that the market is missing the inherent value in the company. If I am correct, there should be significant increase in the price as the market recognizes the value of that relatively secure dividend stream. Buying this undervalued company could give you the "twofer" of a fat dividend while you wait for the capital gain.

"Little boxes, little boxes, and they`re all made out of ticky-tacky...little boxes...little boxes...and they`re all made just the same..." is a song -Yes

This is a wild trade - going in on this one but with a small stake They just raised 30 million in July seems like they will pay thier next 5 million divided in November. This is just a trade not an investment.

0.6

TEU management is purchasing shares at $7/share and has warrants for more at $7.50/share. The price is unbelievably low for a company providing a 17% dividend yield.

Low price to book, paying down debt and a generous div

looks like a good entry point and even if the economy id down the world population is growing and more people= more shipments despite what the economy is doing shipping companies are a good long term investment

Huge dividend of 18%, plus this is a super solid business with orders already maxed out for years to come - how can this stock NOT go up? Plus, at 18% dividend, you're doubling your money every 4 years!! (by the "Rule of 72").

way oversold

selling at under book value, profitable firm

Great dividend, good cash flow.

Young fleet, med term contracts

Nice dividend...company ready for growth in 2012...hope to purchase stock in coming weeks

Looks like a big winner to me. Boosted by the upcoming holiday madness, and improving economic symptoms (not great but stabilizing) I would imagine the demand for shipping will continue to climb.

Sooner or later as the market continues to head south; those companies offering respectable dividends will be forced to cut dividends or relinquish them as their bottom line gets squeezed. Companies can afford to pay out dividends as long as they are turning a profit. The only saving grace may come with the Presidential election in 2012.