So, I bought some more.
We rate DIANA CONTAINERSHIPS INC (DCIX) a SELL. This is driven by multiple weaknesses, which we
believe should have a greater impact than any strengths, and could make it more difficult for investors to
achieve positive results compared to most of the stocks we cover. The area that we feel has been the
company's primary weakness has been its poor profit margins.
The gross profit margin for DIANA CONTAINERSHIPS INC is rather high; currently it is at 50.30%. Regardless
of DCIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed
results of the gross profit margin, DCIX's net profit margin of 15.00% compares favorably to the industry
Compared to other companies in the Marine industry and the overall market on the basis of return on equity,
DIANA CONTAINERSHIPS INC underperformed against that of the industry average and is significantly less
than that of the S&P 500.
The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been
successful management of debt levels.
Net operating cash flow has significantly increased by 243.80% to $8.16 million when compared to the same
quarter last year. In addition, DIANA CONTAINERSHIPS INC has also vastly surpassed the industry average
cash flow growth rate of 10.47%.
Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line
with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers
ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
I found on Google Finance a headline "Caution:Hedge funds are dumping these three high dividend stocks". The article,which only mentions two stocks,by Dan Connelly at Kapitall.com on 8/20/2012 said that hedge funds are dumping high yield stocks. He scanned for high yield stocks above 10% with institutional selling this quarter, and came up with DCIX and BALT. He then said these two may be headed lower.
It wouldn't surprise me that HFs are doing this, especially given the popularity of high yield names with retail investors who they can easily spook. And when you do this with low-cap names like BALT and DCIX, it doesn't take much volume to do the spooking. Fundamental analysis is too hard for the HF guys. For them it's all about gaming the system.
Well I don't know everything.But I do know the dividend here isn't paid out of the EPS .They are paid out of the cash flow and depreciation.Perhaps someone who knows better than I can explain it to us.
Now....When everyone is wrong but you,its time to look at yourself.So do you always feel everyone is wrong ?
Show us your research on how DCIX pays their dividend.
Thanks and have a good day.
About Free Cash Flow
Click "Learn More" below to see how YCharts calculates Free Cash Flow.
Free cash flow is the amount of cash generated by a business that is available for distribution among its security holders. Security holders include debt holders, equity holders, preferred stock holders, and convertible security holders. Specifically, free cash flow is used to pay dividends, make acquisitions, develop new products, invest in new property, plant and equipment, pay interest expenses, and reduce debt.
According to many investors, free cash flow is the best indication of a company's ability to generate cash.