Thesis
Danaos (NYSE:DAC) is a container shipping company. In past years they've struggled with low rates, low expected growth in those rates, and high debt. This caused the company to be valued at a P/E
Danaos: Up 2200% And Still Likely To Go Higher
Summary
- Danaos offers good value here going for a low P/E multiple of 5.
- With a reopening trade and future opportunities to reinvest earnings at a high ROCE, management can use this as an opportunity to turn this company around.
- DAC has been up over 2200% since the last market crash in March and this makes for a good trend-following/momentum play to the upside.
- Danaos is also developing a moat which should let it be valued at a higher earnings multiple than the 5x earnings it is currently being valued at.
I focus on thematic investing, crisis investing, systematic options trading through both premium selling and long-vol positions, and discretionary global macro. I have experience with private M&A along with many years of publicly-traded equities and equity-based derivatives trading experience.
Analyst’s Disclosure:I/we have no positions in any stocks mentioned, but may initiate a long position in DAC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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