Eagle Bulk Shipping Inc (EGLE)

[SmartMoney247]

Following two private placements (USD 88m/100m), Eagle Bulk (EGLE) has not only secured a prolonged runway, but also positioned itself perfectly to prowl on 2nd hand tonnage at close to all time low values. The company trades cheap on steel (1.3x vs. US peers at 1.9x), whilst EGLE’s EV is pricing in USD 12m per Supramax (2008 built avg.), well below 10y avg. of USD 19m for a 10y old Supra. Assigning same valuation methodology as for the rest of the dry bulk space (30% increase in asset values next two
years), expectations of USD 200m of vessels acquisitions and a 10% premium ascribed to EGLE’s above peers financials coupled with an owner/ industry model with low G&A, we initiative coverage on the fully recharged EGLE with a Buy recommendation and USD 6.7/share TP.