I am a long term investor here since share price of a buck. This board used to be full of knowledgeable people. Anyone know of any other divy stocks or better stocks that suspended divy but will likely reinstate. Thanks
Btw gsl is a no brainer over 10 percent divy is a steal for containership co. I wish they had bought back preferred way back when but still commitment led to great percentage divy
This is the way I look at the current price decline:
The CEO has righted the ship in a disciplined approach and has delivered what he as promised. The dividend in december is going to be increased to $00.125/share or $00.50 /share yearly and seems is going to be increased to $00.80/share yearly Next year. So If I buy this stock at $4.50 /share as I type this message and hold the stock for 2 years, I get $1.30 back in dividends and that will lower my buy price to $3.20/share. whats wrong with this situation?? Looks someone is trying to shake the weak hands and get shares for cheap !!
well here we go:
1. common stock class A - divy of 10 cent this q and prob 12.5 cents next
2. common stock class b - no divy
3. pref stock class b - 55 cent divy this q
Frankly, I can't figure out this move either. Everything seems to be going GSL's way. Yuan devaluation? Should be a positive for GSL, makes Chinese exports cheaper = higher freight volumes. Oil price crash? At worst, the savings are passed thru the liners and it's the customers who see lower costs = should also drive higher volumes. And higher volumes = higher rates, all else equal.
My best guess is that the market doesn't fully understand that the dividend is going up to .125/q in a few months, and so GSL is instead getting (mis-)priced on the basis of the .10/q divy. In other words, it's a buying opportunity.
Initiates dividend and goes to 6.40 and now trades at 5.20 with a divy increase coming in q4. has the least leverage among container shippers and now has the highest yield. I think yield should be 8% or less. That puts us at 6.25+. Well see it again soon methinks!
Perhaps lost in the dividend news is that GSL was able to line up new bank financing for the newly-acquired OOCL ship. Given the history of this company with its miserly banks, it's almost inconceivable to think that a bank has now voluntarily lined up to provide fresh financing on competitive terms (L+275 for 5 years). What a turnaround! And the use of cheap debt almost certainly means this ship deal will be accretive to GAAP earnings.
Now if only GSL could refi the horrendous 10% notes on similar terms (i.e. L+275 and probably covenant-lite), this company would really be worth something.
Now the question is whether the market will be happy leaving the stock price where it is, with a 9.6% forward dividend yield. SSW which is a larger co but also much more leveraged than GSL (Debt/Eq 2.4 vs. GSL's 1.1) trades at about an 8% div yield. GSL at an 8% yield would put the stock price at $6.25.