Posted: Friday, June 14, 2013 7:51 AM ET
Diana Containerships (DCIX) Yield:23.1%Diana Containerships has broken many a heart over the past five years, as its stock has fallen from nearly $15 per share to just over $5 today, and with analysts expecting quarterly losses through at least the end of 2014, it seems like a bad bet for a turnaround. Upon close examination, however, things don't look as bad for the company as they initially appear. DCIX has a debt ratio of just .29, though it has taken to borrowing money from its former parent company, Diana Shipping (DSX). Recently approved was a secondary stock offering which will result in a dilution of approximately 25%. That will mean the same amount of money, when paid in dividends, must be spread 25% thinner. Still, with the current dividend yield sitting at over 23%, a dilution there is of very little concern compared to the possibility that the company will fail entirely. As for that, the secondary offering will raise $50 million, and combined with the $31 million DCIX now has on hand, this company may still have enough leeway to turn itself around.
Chart courtesy www.stockcharts.com.
Julian Close has been a professional business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Masters of Teaching degree from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.
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