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On October 1, The Wall Street Transcript interviewed Urs Dur, Vice President and Shipping and Logistics Analyst at Lazard Capital Markets. Key excerpts, including his sector picks, follow:

TWST: Who should investors look at in the dry side?


Mr. Dur: We cover only four dry bulk companies. We have buys on all of them. Since I don't cover the others, I'm not going to recommend the others. We have Navios (NYSE:NM); that's a buy with a $17 target. Genco (GNK) is a buy with $63 target. Eagle (NASDAQ:EGLE) is a buy with $32 target. Diana (NYSE:DSX) is a buy with $32 target. The companies are all well placed. I like Navios a lot because it has nice built-in growth. It is a growth company. It is not a yield-based stock. It's focused on the EPS growth. We have EPS growth forecasts for end 2006 to end 2009 at over 65% CAGR and that's exquisite. It also has a very attractive balance sheet and a nice young fleet, as well as a nice diverse business operation - everything from a port. They own a port in Uruguay, but they also own ships. They charter ships. They work in the freight forward agreement market, which is a freight derivative market and they're generally successful there. I like their diverse business model and plan.

I like Genco. They just have a tremendous amount of built-in growth. They will be taking on, I believe, some debt to finance the built-in growth, but they also have a lot of long-term contracts to help finance the growth. They have the debt facilities in place right now to finance everything that they have agreed to buy, so that is no problem. They have a nice dividend, which is not a full dividend payout. It's about 60% of operating cash flow. As the fleet grows, I expect the dividend to grow. It's yielding around 6% today, and I would expect that to keep going.

Eagle and Diana are similarly structured companies. Eagle also has a very big growth program in place and a number of ships on order. What's very interesting about Eagle and sets them apart is that they have particularly long charter maturities coming up, which is very good for cash flow. They also have ensured the existing charters that they have. Those cash flows are ensured through 2010. This has never been done before. They have the debt in place to do it. They have a built-in growth system. They have good chartering relationships, a very young fleet, and a very attractive dividend. I find them extremely attractive. You're going to buy that stock, it's going to move up into the $30s and you're going to get a very attractive yield coming up.

Diana is similar, although they don't have the same amount of built-in growth. I like that they have more exposure to a very strong 2008 market than most of their competitors. That leads to their being able to increase their dividend over time too. They are very attractive.

Source: Shipping Sector Stock Picks