I have long been a fan of Diana Shipping because of its restrained expansion policy in boom times, strong balance sheet with low leverage and good liquidity and its conservative chartering policy. This was very unfashionable in boom times and some felt that CEO Simos Palios was a poor steward for his shareholders. They found the block deals at record prices and substantial debt leveraging of its peers more exciting. They discounted asset impairment charges and loan restructuring as of no consequence to shareholder value. In these times of crisis, however, Diana is well placed to survive and profit.
Natasha Boyden lifted her rating on the NYSE-listed bulker owner from "hold" to "buy." "We believe [Diana's] healthy balance sheet, high charter coverage and strong free cash flow generation puts the company in a position of strength to potentially expand its fleet by buying vessels at what we view as potentially distressed asset values," she wrote in a note to clients. She said Diana's share price offers an "attractive entry point" for investors.
I do not always agree with Natasha, but I think that she taking a reasonable position here. Others have complained about the company's brokerage commissions levels and practice to put their vessels on charter to operators. The company's relative openness and transparency gave them some room to make such comments because many peer dry bulk companies keep private their chartering details. There is little evidence that Diana is out of line with peer performance in these matters and openness on these matters with investors is to management's credit.
These are challenging times and Diana is one of the few listed shipping companies with a genuinely strong balance sheet to create substantive shareholder value.
Natasha Boyden lifted her rating on the NYSE-listed bulker owner from "hold" to "buy." "We believe [Diana's] healthy balance sheet, high charter coverage and strong free cash flow generation puts the company in a position of strength to potentially expand its fleet by buying vessels at what we view as potentially distressed asset values," she wrote in a note to clients. She said Diana's share price offers an "attractive entry point" for investors.
I do not always agree with Natasha, but I think that she taking a reasonable position here. Others have complained about the company's brokerage commissions levels and practice to put their vessels on charter to operators. The company's relative openness and transparency gave them some room to make such comments because many peer dry bulk companies keep private their chartering details. There is little evidence that Diana is out of line with peer performance in these matters and openness on these matters with investors is to management's credit.
These are challenging times and Diana is one of the few listed shipping companies with a genuinely strong balance sheet to create substantive shareholder value.
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