Danaos: Market Seems Overly Alarmed By Current Rates

Oct. 11, 2022 11:06 AM ETDanaos Corporation (DAC)ZIM5 Comments

Summary

  • Container shipping rates are low and likely to head lower.
  • A lot of capacity is coming to the market.
  • But environmental regulation and low rates should result in capacity increases being mitigated.
  • Danaos Corporation has signed a lot of longer-term charter deals.
  • There's a lot of uncertainty beyond 2024, but this appears more than priced in.
  • Looking for a portfolio of ideas like this one? Members of Special Situation Report get exclusive access to our model portfolio. Learn More »

Worker using walkie-talkie in commercial dock

shih-wei

Danaos Corporation (NYSE:DAC) is a container shipping company with a market cap of ~$1.18 billion and an enterprise value of ~$1.57 billion. This translates to a share price of $54.45 per share. In the most recent

Chart
Data by YCharts

Danaos environmental regulation

Danaos environmental regulation (Danaos)

Chart
Data by YCharts

Fleet growth container shipping

Fleet growth container shipping (Danaos)

container spot rates

container outlook (NRF & S&P Global Commodity Insights)

Danaos debt overview

Danaos debt overview (Danaos)

Container shipping valuations

Container shipping valuations (Seeking Alpha)

I write the Special Situation Report. I look at special situations like spin-offs, share repurchases, rights offerings and a lot of M&A events. The point is to make money with risks under control. Check it out here. Follow me on Twitter here 

This article was written by

Bram de Haas profile picture
17.52K Followers
Special-Situation And Event-Driven Ideas To Improve Risk Adjusted Returns
15 years of investing and I feel like a rookie in his first year at the academy. My roots are in the value school but over time I've learned to respect different approaches. I'm interested in what quants do, options traders do, and even what WallStreetBets is doing (keep your friends close and...)

I gravitate towards special-situations. That means situations around companies or the market where the price can move in a certain direction based on a specific event or ongoing event. This eclectic and creative style of investing seems to suit my personality and interests most closely.

Since 2020 I host a podcast/videocast where I discuss (special-situation/event-driven) market events and investment ideas with top analysts, portfolio managers, hedge fund managers, experts, and other investment professionals. I highly recommend it (pick episodes around topics that interest you) for the amazing guests that come on with regularity.

I've been writing for Seeking Alpha since 2013 after playing p0ker professionally. In 2018 I founded Starshot Capital B.V. A Dutch AIF manager. Follow me on Twitter @Bramdehaas or email me Dehaas.Bram at Gmail

Disclosure: I/we have a beneficial long position in the shares of DAC 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.

Recommended For You

Comments (5)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.