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Danaos: Too Cheap And Profitable To Ignore

Aug. 16, 2023 4:24 AM ETDanaos Corporation (DAC)EGLE, GSL4 Comments


  • Danaos' Q2 FY2023 results showed a decline in earnings due to the exclusion of the previous year's ZIM dividend, but debt was reduced and liquidity remained strong.
  • Danaos invested in the dry bulk market at an attractive valuation. This diversification effort looks awesome.
  • Despite the anticipated annual EPS decline, the stock maintains too cheap valuation multiples, offering investors a solid margin of safety.
  • Danaos stock is a clear Buy, in my view, despite all the risks.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Финансово-хозяйствеочная концепция зарабатывания денег

imagedepotpro/iStock via Getty Images

My Summary Thesis

You are reading my 11th article on Danaos Corp. (NYSE:DAC) stock here on Seeking Alpha, and it is also Buy-rated like the other 10.

That's because unlike ZIM Integrated Shipping (ZIM

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This article was written by

Oakoff Investments profile picture

Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

He leads the investing group Beyond the Wall Investing with features that include: a fundamentals-based portfolio, weekly analysis on insights from institutional investors, regular alerts for short-term trade ideas based on technical signals, ticker feedback by request from readers, and community chat. Learn more.

Analyst’s 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.

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.

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Comments (4)

The company doesn't care about shareholders, that's the problem. If the book is not cooked, they could simply buy back stock and gain 100%+ immediately. I've never seen any valid explanation why they don't do it.
Taro Watterson profile picture
It’s all about return to shareholders. Danaos uses money to buy a stake in another publicly listed dry bulk company rather than paying dividends or buying back the stock. This makes no sense for the investor and is only for the management. Pay the money as dividends and we can decide for ourselves if we want to invest in this drybulk company. Bad Management. Not as bad as Navios but still bad.
CincinnatiRick profile picture
Not to conflate Danaos with Navios but, as compared to many other options in the maritime sector, they have been less generous in sharing the profits with the bagholders. The discounted valuation noted by the author is at least partly attributable to that history and we are given little indication that is going to change anytime soon.
SamsSuperCereal profile picture
They will have some good opportunities if shipping slows down because they don't have to worry about debt. How many competitors can say the same?
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