Must-know: An overview of Diana Shipping’s earnings (Part 5 of 9)
Diana’s containerships investment and outlook
On July 28, 2014, Diana Shipping (DSX) entered into an agreement to purchase shares of the common stock of Diana Containerships Inc. for an aggregate purchase price of $40 million. In addition to the company’s investment, two institutional investors not affiliated with the company or DCIX purchased $40 million of common shares. Mr. Simeon Palios, chairman and CEO of the company and DCIX, a member of his family, and other members of DCIX senior management purchased an aggregate of $12 million of common shares.
Diana Shipping has invested almost $100 million into Diana Containerships over the past 12 months. Diana Shipping has invested through debt and equity. The company believes that there are more attractive opportunities and potential return in the containership sector.
DSX believes that the existing investment in DIX is supporting its performance. Looking ahead, DSX is more positive in regards to the fundamentals on the Containerships sector and especially the medium size vessels there.
Also, Diana Shipping Inc. strongly commented that it has the necessary dry powder to continue its investment strategy in the dry bulk sector and other ground purchases. The company works to benefit Diana Shipping’s shareholders. This creates additional value.
Overall, DSX provides a positive outlook of the industry for the long term, with a few near-term issues. The company has peers like DryShips (DRYS), Navios Maritime Holdings (NM) and Safe Bulkers (SB). The Guggenheim Shipping ETF (SEA) tracks shipping companies.
Browse this series on Market Realist:
- Part 1 - Must-know: Diana Shipping’s earnings
- Part 2 - Why Diana Shipping’s 2Q revenue increased with a larger fleet
- Part 3 - Must-know: Diana Shipping’s bottom line analysis
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