Diana Shipping Inc. (DSX) provides shipping transportation services. The company, through its subsidiaries, operates a fleet of vessels consisting of dry bulk carriers such as Panamax, Kamsarmax, Post-Panamax, Capesize and Newcastlemax vessels. Using this fleet, the firm provides transportation services for various goods including coal, iron ore, and grains.
While earnings missed estimates in the most recent quarter, they were still up year over year. The company is benefiting from strength in the dry bulk shipping market as the economy opens up and more companies ship products. Plus, the rates on Supramax and Handysize transport ships are getting closer to rates last seen in 2008, which was a record year.
The company had $155 million in cash as of the most recent quarter, which compares favorably to no short-term debt. From a growth standpoint, analysts expect earnings to soar 266.7% year over year, leading to a Growth Grade of B in our POWR Ratings system.
The stock appears undervalued with a forward P/E of 15.41. The stock has also shown bullish momentum since last fall as shown in the chart below.
Take a look at the 1-year chart of DSX below with added notations:
Chart of DSX provided by TradingView
Once DSX bottomed out last fall, the stock embarked on a rally that took it up to the $5.50 level (red), which has since become a tough resistance to break. That level is also preventing the stock from reaching new 52-week highs. DSX has just fallen back from $5.50 again, but a reversal should be monitored for a potential breakout.
The ideal long position on the stock would be on a breakout above the $5.50 level, with a protective stop placed below the entry point.
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DSX shares were unchanged in premarket trading Thursday. Year-to-date, DSX has gained 172.54%, versus a 21.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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