Mike,
SBLK has real potential. I'd recommend you read the last conference call. It's following the same script as the fuel haulers did right after oil crashed. Make money and then give it all back 2X if you hold too long. These companies languish for many years like a commodity stock in a down cycle. I thought about this six months ago but was unfamiliar with sector.
After you give the CC a read your opinions on the following please....
Management is transparent, some of the analysts are skilled and asked the right hard questions IMO.
Dividend is huge, they pay from a formula. Next ex-div is DEC 9 IIRC, I see no reason the next div won't be very good as well. Dividend is large enough to consider in the near-term risk reward. hard to imagine this stock isn't running into the ex-dv.
Pay attention to their recent per ship operating costs vs current revenue. They just hedged some of 2022 work (38% of fleet?) and the price looks favorable.
It appears their primary hauls are jet fuel, grain and coal. Maybe there is more but you aren't flipping purpose built ships between those commodities. I hate it when my corn flakes taste like jet fuel or coal.
I got the impression China vs Australia conflict is relevant to them. (Coal imports) which has been in the news a month ago.
Analyst upside price target is +16 from here so I will cut that in half. The stock has already run hard as it should have.
Company is paying off their near-term debt. It was 8% interest so you know what that means. They are also buyig back shares ow after a huge run up. That helps keeps a floor under the stock for us now but it's insanely stupid instead of waiting until next year after the stock gets halved or worse.
I see this as no different than entering a commodity mid cycle. Better be ready to hedge it fast or you will ride it down with little warning. The company can hedge all they want but the market will throw the baby out with the bathwater when sentiment turns on the sector.
I'll re-read the earnings call more thoroughly today.
SBLK has real potential. I'd recommend you read the last conference call. It's following the same script as the fuel haulers did right after oil crashed. Make money and then give it all back 2X if you hold too long. These companies languish for many years like a commodity stock in a down cycle. I thought about this six months ago but was unfamiliar with sector.
After you give the CC a read your opinions on the following please....
Management is transparent, some of the analysts are skilled and asked the right hard questions IMO.
Dividend is huge, they pay from a formula. Next ex-div is DEC 9 IIRC, I see no reason the next div won't be very good as well. Dividend is large enough to consider in the near-term risk reward. hard to imagine this stock isn't running into the ex-dv.
Pay attention to their recent per ship operating costs vs current revenue. They just hedged some of 2022 work (38% of fleet?) and the price looks favorable.
It appears their primary hauls are jet fuel, grain and coal. Maybe there is more but you aren't flipping purpose built ships between those commodities. I hate it when my corn flakes taste like jet fuel or coal.
I got the impression China vs Australia conflict is relevant to them. (Coal imports) which has been in the news a month ago.
Analyst upside price target is +16 from here so I will cut that in half. The stock has already run hard as it should have.
Company is paying off their near-term debt. It was 8% interest so you know what that means. They are also buyig back shares ow after a huge run up. That helps keeps a floor under the stock for us now but it's insanely stupid instead of waiting until next year after the stock gets halved or worse.
I see this as no different than entering a commodity mid cycle. Better be ready to hedge it fast or you will ride it down with little warning. The company can hedge all they want but the market will throw the baby out with the bathwater when sentiment turns on the sector.
I'll re-read the earnings call more thoroughly today.