Eagle Bulk Shipping Inc (EGLE)

[Realperson]

Is Dry Bulk Shipping All Dried Up? (EGLE, DRYS, SB, ESEA)
June 09, 2009 | By Sham Gad

http://community.investopedia.com/news/IA/2009/Is-Dry-Bulk-Shipping-All-Dried-Up-EGLE-DRYS-SB-ESEA0609.aspx?partner=YahooSA


Eagle Bulk Shipping (Nasdaq:EGLE) primarily sails a fleet of Supramax ships. These are smaller ships than the huge Capesize and are equipped to carry just about every type of dry bulk cargo. Additionally, Eagle's business model is to enter into multi-year charter contracts for its ships, thus minimizing revenue volatility when the shipping rates shift. Over 74% of its fleet is covered by charter for 2009. This model is unlike DryShips, which was more focused on the spot market, so it was feast or famine for the company depending on shipping rates. The key is to pay attention to Eagle's debt. The company has renegotiated its covenants, so it has no immediate liquidity needs; if the credit markets seize up again, things could get bumpy. The shares trade at $6, and the company earned 37 cents a share for the 2009 first quarter, with a fleet utilization of 99%. These are impressive numbers in a terrible environment. If we normalize earnings for the year - which is plausible because ships are locked into contracts - then 2009 EPS is $1.48, implying a P/E of four.