1. The entire industry is in meltdown. How long will this last? I figure one year but what do I know.
2. They have long term charters going out 1-2 years. How mnay will be broken by shippers going BK. I don't know. This is a big question. Right now they are making a ton of cash.
3. Any charter renewals done this year will be at a much lower rate, although the smaller ships go for more than the biggest ships (go figure), and EGLE has smaller ships.
4. Their debt is fabulous but tied to real value (the ships). Right now, however, the value of a ship is below its replacement cost. Like the mortgage market. As long as they can service the debt, I don't think this will be a problem.
5. The dividend is unchanged and was reasonable. The problem is the price per share which plummeted. As long as the cash flow continues, that will be OK. Having such a high yield is obviously a big danger signal; obviously many people think it will fall and fall a lot.
6. I personally think EGLE will survive the next year and the world economy will recover; actually China is growing at 8% instead of double digits, not exactly a calamity. The dividend will probably fall to half but the price per share already has taken this into account. I think this is a good time to buy. JMHO.
This is my own technical device and in this market I don't know if it will work, but according to the SAR Parabolic and RSI this is so oversold it's not funny. This is going to post a green dot on the SAR and then it's a buy. The RSI is already screaming an oversold position.
With the Dividend compared to U.S. treasuries, this is unbelievable. If they pay the full div in February, the stock at a 10 p.e. is worth $14.60 and at a div rate of 10% puts us at $20. I think $15-$20 is fairly valued. Someone mentioned $40. I think it would take a long time to get to $40. In fact, I just don't think that is doable in this environment. $15 looks good to me.
Are any of these companies going to survive? Most $3.00 handle stocks often do not. Looks like the bond holders are going to own these companies eventually. Any reasonable person has to at least think that is a possibility. The ships will be sold off to make the bondholders (not stockholders) partially whole at least. Too much debt, not enough revenues going forward.