Dry bulk shipping is making a big comeback and many shipping names are rising from the ashes. The Baltic Exchange’s main sea freight index increased to its highest level in more than 11 years, fuelled by strong
Star Bulk Carriers Is Printing Money
Summary
- Star Bulk owns one of the largest and most diverse dry bulk fleets; 128 vessels ranging from Supramaxes to Newcastlemaxes.
- Under most scenarios, annual operating cash flow is poised to surpass $700 million and might even reach $1 billion if the strong market continues over the next few quarters.
- Generating these levels of cash is very attractive relative to today's market cap of $2 billion and total debt of $1.6 billion.
- The notion of being debt free in the coming years is not that far fetched. Q2 2021 results were outstanding (~ $140 million in operating cash flow) and Q3 is expected to be even better.
- The Baltic Index is at the highest level in more than 11 years, the newbuilding orderbook remains low at ~6.0% of the fleet (close to record low levels), and new ordering has been subdued despite a strong market.
Value-oriented investor focusing on marketable securities, real estate as well as early-stage companies.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of SBLK either through stock ownership, options, or other derivatives. 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.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.