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Alex Filonov
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I was born in 1956 in USSR. After graduation from college in 1979 I worked full-time as an IT specialist. Until 1990 I worked for different companies in the Soviet military industrial complex. I created a small software business in 1991, which failed in 1993. I worked for Oracle Corp in 1995 in... More
My blog:
Muddling Investor
  • Into Shipping 2 comments
    Mar 7, 2013 12:20 AM | about stocks: DSX, DCIX

    It's a risky business, I know. But Jim Cramer recommended Diana Shipping (NYSE:DSX) as a play on increasing international trade. That made me thinking.

    I don't actually like DSX. It's specialty is bulk carriers. There are two problems here, both originated in China. First, China is trying to switch from raw material intensive economy to more efficient one. That means less raw materials (or at least not much increase in use). Another problem: in the last decade shipbuilders built way too many bulk carriers. DSX is a quite efficient company, but it's working on the saturated market. Not much potential here. No wonder DSX doesn't pay any dividends.

    But there is another play on the international trade. Most of the trade goods are shipped in containers. Container shipping is increasing faster than bulk shipping, and potential for growth in here.

    Decision came easy. Diana Containerships (NASDAQ:DCIX) is a sister company of DSX. As the case with DSX, company is very transparent. On company's web site you can find information on current and future ship leases. Company's financials are in good shape, profits are increasing and dividend is stunning 18%.

    I opened position in DCIX today. If stock falls down more, I will increase this position.

    This is a risky investment, I wouldn't recommend it as a part of conservative portfolio. But my portfolio (except for the fixed income part) is quite risky anyway. That's why I don't recommend anybody piggibacking on my investment decisions. If you do, it's your risk, not mine.

    Disclosure: I am long DCIX.

    Additional disclosure: I have no positions in DSX. Positions can change any time.

    Themes: Transports Stocks: DSX, DCIX
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Comments (2)
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  • Yangminghsun
    , contributor
    Comment (1) | Send Message
     
    thank you for the info. I have been looking at DCIX and trying to find out how it can pay so much dividend with such low profit.

     

    Nevertheless, when you mention Jim Cramer says DSX is a buy it probably means its time to jump ship. I have seen many Jim's bad calls and I actually make good profit doing the opposite of what he said.
    6 May 2013, 08:25 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    Author’s reply » Stock is down from the point I bought it. I'm still not sure if I want to increase position.
    Not sure about bidding against Cramer. Sometimes his calls are good, sometimes bad, but overall he made me a lot of money.
    7 May 2013, 09:52 AM Reply Like
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