- Star Bulk Carriers is a dry bulk pure play with the largest publicly-traded fleet, with 108 vessels.
- Last Friday, they announced an acquisition of 18 vessels, funded by 17.1M new shares and debt transfers.
- This on the immediate heels of a recent 16 vessel deal.
- This is a Value Investor’s Edge long position, fair value estimate: $16/sh, 20% upside.
Company
According to a news report published by the Seeking Alpha, the Star Bulk Carrier with its glorious fleet continues its consolidation process. The dry bulk shipping pureplay, with 99 directly-owned vessels and 9 long-term leased vessels have a diversified fleet mix, but their primary exposure is towards the larger Capesize and Panamax segments, which are utilized mostly for iron ore and coal transport. The chart below shows their vessel mixture.
Source: Value Investor’s Edge, Analytics Platform
Although their fleet profile is mixed, when sorted by their cargo capacity (deadweight tonnage, or “DWT”), we can see that SBLK is heavily dependent upon Capesize performance.
Source: Value Investor’s Edge, Analytics Platform
Market Overview
Capesize rates were quite strong in late-2017, hitting daily rates of around $30k, with Q4 averages in the mid-$20s. These were the strongest segment results since 2014. Rates dipped back into the seasonal low period in February-March, and due to extensive flooding and other disruption in Brazil, rates remained weak until early April. Rates then soared through last week but are now catching a pause around $14k/day.
For full report, Please visit here
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Source: Seeking Alpha
