I do not see a reason for a drop, I'm pretty sure the stock should go up ,Just keep earning and reduce debt
Might drop under a buck. Wait a couple days.
The market has already reacted.
Of course DAC will have an adjusted net income of around $28m (I assume you mean adjusted net income when you say "profit" because "profit" is not a line item DAC reports)
DAC also had $27.9m adjusted net income in Q1. It's had a similar adjusted net income for many years.
By the same token, the covenant default stigma has been lifted for MONTHS now.
It's not like investors are suddenly going to wake up one day and say "wait, the debt is renewed & DAC makes $25m per quarter? I had no idea!"
If the price rises, it will NOT be for the reason of "filings indicate exactly the same trajectory the company's been on for years"
IMO, DAC should react at least to the value of its profits, I know that this has not happened in recent quarters because of uncertainty about the debt, but now that the debt is spread, I believe the stock will increase according to the profit it will achieve.
I do not see the possibility that the company will profit and the share will not rise.
The analyst, who is reviewing the company, expects $ 20-28 million in the second quarter and continued large profits in the coming quarters.
I have patience
Price definitely could go above $2 again
But the movements have nothing to do with filings IMO.
there's never any surprises in the filings.
only half and I bought it back at 1.6
I am waiting for the quarterly report, believing that the share will return above $ 2
Lenders converted debt -> equity at approx. 3.5x market price.
That surely indicates how distressed banks believed this company was... because they would not accept a $400 million haircut unless they expected much worse to happen if DAC didn't get some debt relief.
Did you cash in when the refinance was announced?
Market has decided once again that DAC is worth a buck-fiddy.
Two things I want to say, following the agreement with the banks value of the company increased by 551 million dollars and the risk of bankruptcy significantly decreased and an increase of 40 cents does not reflect the fair increase.
The second thing I saw today was a report by DCIX and the TCE rats was more than double than it was last year.
Both, I and investors expect a decline in profits, but in my opinion this is already embodied in the share price.
I intend to track and buy or sell according to the following reports.
So far I was right and you know that.
Buying this based on P/E is a horrific mistake. DAC has been a trap for years for people who thought the P/E was too good to be true.
Revenue is going to keep dropping faster + faster as the charters expire. Shareholders don't get to enjoy today's temporarily high earnings because all the cash is being plowed into debt service. By the time the debt is paid off, the charters will be long gone.
Eventually you'll end up with a fleet of 15 year old ships which are barely breakeven at spot rates.
DAC may or may not make new charters but they will not be at rates anywhere close to the rates of the expiring charters!
The agreement with the lender has ALREADY reacted positively in the stock price, it went up from ~$1.30/sh to ~$1.70/sh. That's about 30% jump in just a few months.
Even after the dilution, the P/E is still very attractive. Do not forget that the dilution was made at $ 5.5 per share, and do not forget that the debt is going to keep decreasing and therefore the future financing costs will decline. I do not know what is the value of the ships , but I know that the revenues from the ships are $ 450 million each year !
As for charters expire this happens to every company in the industry, I believe new contracts will arrive.
The agreement with the lenders is very positive and this should be expressed positively in the share price.
Profit's going to keep decreasing as its charters expire.. and on top of that, the O/S is set to double once lenders take their 47.5% equity.
So its P/E is about to double.
And you seriously looking at P/B ..? You think DAC could sell its ships at book value? LOL.
there's a reason the market's pricing DAC under $2 still
DAC may be a good buy but not for the reasons you're giving.
I believe that the profit will increase because the debt was reduced by the agreement with the banks The P/E 2.5 the P/B 0.3 !
Very attractive in my opinion
Do you have a link to the transportation index relevant to the DAC? Thanks
I understand that the current transportation price is lower than the previous price. I understand that the profit is expected to decline. I think that if BDI rises, the rest of the indices will rise. In the meantime, the company is reducing the debt and the stock price already embodies the possibility of profit alongside the risk. I invest a bit according to the risk ... and follow.
btw I first bought DAC in 2008 and I've made a few profitable swing trades over the years. So I have history.
I was ready to buy again ~2 years ago when it hit $3.50 - $2.50 but another poster warned me how their ships market values were WELL below their book values. He was shorting the stock (I never have) and that's when I realized the end-game for DAC is not a happy story.
The massive P/E was a mirage which drew in a lot of naive investors (myself included), by luck I always got out when it "felt" like the stock had peaked. I never thought DAC would fall below $3. (That's lower than the price which Costas invested liquidity in 2010)
But if even the founder & 80% shareholder overpaid for his recent shares by 3x, that's pretty scary to me. He badly mispredicted the coming shipping rates by dumping DAC's spare cash into even more self-serving shipping expansion (Gemini Ventures)
BDI is not relevant to container shipping rates. They are completely different cargoes that cannot be sent on the same vessels.
If you are buying stocks based on a bet that container shippings rates will go up, that's a perfectly valid speculation.
Then the question becomes: Why DAC? There are other shippers who are as much or more exposed to a rise in container rates (e.g., larger vessels, newer vessels, new ships on order, etc) not to mention DAC still has that sword of default hanging over their necks.
Yes they've lasted 2 years without consequence on their default and maybe they can ride it all the way until payoff... but my hunch is that if there is any kind of significant rally in shipping rates (which would raise the value of DAC's vessels) ... the lenders will immediately swoop in and demand their concessions while their foreclosure equity is good. That's when we could see another dilution.
You keep talking about "finding new customers" which of course they can do, the issue isn't new customers, the issue is that no new customers will pay above-market rates. So there's no way DAC can replace their shrinking charter income, because those charters were signed a decade+ ago when market rates were 8x as high as they are today.
I'm not at all trying to discourage your or anyone from owning the stock. I'm just hoping someone can make a coherent case for this company past the mirage of temporarily-good revenues which run out before the debt runs out.
The fact that you think BDI is relevant to DAC's income suggests you haven't looked at this stock any further than the simplest financial metrics, and you don't seem to accept the structural difficulties it will face in the next 5-7 years.
Baltic Dry 1,052.00 27.00 2.63%
The most important thing is that the BDI will rise and it rise again today 2.63%
All shipping companies have the issue of contracts that expire, DAC has the ability to find new customers and even if it difficult and not sure they have a large enough fleet that operates and will keep them profitable. But of course it's not safe and the investment is risky on the one hand and can give a high return on the other.
From the financial report you know that its off-charter ships are not making money.
So what do you think happens to the company when the charters expire, there is no debt, and DAC has a fleet of 10-20 year old ships that don't make money?
All the information I have is based on the financial report. The company generates a large cash flow and therefore the bank will allow it to continue to operate. I bet that the transportation prices will improve while cash flow reduces the debt and with it the financing expenses.
Have you done some math on this or is it a gut feeling?
I believe DAC is laying up several of its ships. Simply because it's cheaper to store them than to operate them at a loss.
So what happens if container rates stay where they are? Once the charters are complete, half of DAC's fleet gets laid up or sold for scrap, and the other half (e.g., supermaxes) ekes out a meagre profit.
that's not even thinking about the financing situation, which may indeed be dire. DAC's been in default for 2 years. Who knows what's going to happen, if anything, to remedy the default. However, 8 years ago the defaults were remedied with a giant equity dilution at slightly below market prices ($3/share I believe). If that happens again, the dilution would have to be massive since it would be something like $0.80/share.
So we've got a 1-2-3 punch of expiring charters, low spot market rates, and looming dilution.
5 years from now, DAC could have an EPS of $0.05/share. So while the numbers today look good at a superficial level, they are not sustainable and they don't really matter since DAC doesn't have cash available to return shareholder value.
Aside from a miraculous, drastic jump in containership rates, i don't see how DAC avoids becoming a barely-breakeven shipper in the long term.
Just how i see it. If you have an angle I've missed, I'd love to hear it.
I believe that all this information is already embodied in the cheap share price.
This ship is newer than most or all of DAC's fleet and it got scrapped:
Why do you think Hanjin went bankrupt? That's right, in part, they had to pay huge expensive charters to DAC when the revenue they earned from those ships wasn't even 1/4th what they were paying
Same with Zim.
If DAC is lucky, no more of its counterparties will go bankrupt, but every day brings DAC one day closer to the end of its luxurious overpriced revenue stream.
the market for container transport has crashed since the charters were signed. There is an oversupply.
That's why shippers are laying up or scrapping vessels which are only 15 years old or newer.
You gotta know the shipping rates if you intend to invest in a shipper
What prevents the company from getting new charters? I believe they will get new contracts
The numbers look good but the problem is all the profits are from charters which are going to expire in a few years.
P/E is going to crumble fast as the charters are wound down.
Sure, most or all of the debt will be paid off by the charters but at the end DAC will be left with a bunch of worthless boats that don't make money. And you'll have tied up your equity that entire time.
This stock sometimes runs and it has nothing to do with stupid charting voodoo.
It's never going to "run" without at least 1 of 2 things happening:
1. Long term debt refinancing
2. Strong recovery in shipping rates
You gotta stick with high liquidity stocks for charting nonsense.
That was a bad buy!
I think people should stay away from DAC until they announce how they're handling their debt covenants (which have been in default for about 6 months now)
Even then, you probably want to be a wizard at predicting containership rates and/or containership values. Because the ships are the only thing this company will have left over after the charters are expended to pay off the debt.
Did you eventually bail out after that month?
I foresee another year+ of pain with all shipping stocks, and that's even if the economy doesn't tank (which is possible).
too much capacity coming online and everyone is struggling to be the last man standing.
Wow, down below $2.
I got convinced that this company is all downside and very little upside. The debt is going to eat up all the charter income.
Best case scenario is in 10 years DAC has a bunch of old ships that barely earn more than their running costs to operate
Worse case scenario is financing terms carve out another huge chunk of equity, and at the end of the charters, the boats have to be sold for scrap.
Unsurprisingly the financials were pretty disappointing. Most of the bad news was priced in already.
The breach of covenants is very worrisome. DAC was supposed to be past that 5 years ago with their refinancing and now they are up against the wall again.
There's a lot of potential volatility in this stock price. I may re-buy some if it touches $2.50.
Sure it moved... down below $3 again!!
I have no idea why you think this will have "volume" or hit $10. You haven't given any reasoning at all.
I'm not sure this is worth investing in. Feels like the best case scenario is no more long-term charters are cancelled, they pay off the loans, and in 10 years they have a bunch of boats that can barely earn their maintenance costs on short-term charters.