Read carefully, the dividend is only payable against NET INCOME, not FREE CASH FLOW.
Irrelevant in either case, given where the market currently is. Q4 will be the last dividend.
Q4 market averages...
>>The company reported a net income breakeven level of $13,254 is required in its December investor report.<<
Here is their December presentation. Maybe I am reading it wrong, but it indicates daily breakeven of free cash flow of $8,215 (see page 12). You pointed out Net Income breakeven of $13,584, which includes depreciation of $4,550.
The company reported a net income breakeven level of $13,254 is required in its December investor report. All of the indices are below the breakeven level.
What should be even more troubling to investors is the fact their balance sheet shows $363M of "assets". Looking at their fleet and recent transactions for new and used vessels, it appears their fleet could be replaced today for something around $285M. That means shareholders are going to see a 27% trimming to the company's NAV, which is why the stock has dived into the sub $9 range.
Following what is shaping up to be a dismal Q1, look for a new equilibrium in the $8.00 +/- range.
I think the earnings will disappoint and the dividend will be cut. It sucks if you are holding short term but if you are holding it for the long term, then I think this would be a great BO. Hey, if worse comes to worse they have no debt and a fleet of new ships so I'm sure someone would be glad to acquire them if they can't make it work.
<This alone will begin the oversupply correction> Are you kidding? Supply of new vessels jumped 18% last year even after all the cancellations and delays, and its set to jump by another 18% this year! Even with good cargo growth, the oversupply condition will take quite sometime to solve itself and it requires scrapping of old vessels, not just cold layup of new vessels. But the reality is, a new vessel has variable costs of close to $4-4500/day so there is plenty of pain left to be felt across the sector. This stock may yet rebound, but it wont be anytime before 2012. Remember the charters are all indexed linked and the spot index is going to be in the toilet for a while to come! There will be no dividend by Q2 and it will only get worse from there!
the BDI one day turns positive. Anyone have a crystal ball? I'd like to jump in the day before if so...
Or when hell freezes over, Kidding of course. I`ve been watching BALT ever since I saw the CEO on Mad Money about a month ago. Hasn`t had many Green Arrow Days since.That being said I believe it`s time to buy BALT.