5-Star Stocks Poised to Pop: Diana Shipping

By Brian D. Pacampara | More Articles
January 5, 2011 | Comments (3)

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, dry-bulk shipper Diana Shipping (NYSE: DSX ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Diana's business and see what CAPS investors are saying about the stock right now.

Diana facts

Headquarters (founded)	Athens, Greece (1999)
Market Cap	$1 billion
Industry	Shipping
Trailing-12-Month Revenue	$261.1 million
Management	Chairman/CEO Simeon Palios (since 2005) CFO Andreas Michalopoulos (since 2006)
Return on Equity (average, past 3 years)	18%
Cash/Debt	$311.2 million / $337.3 million
Competitors	DryShips (Nasdaq: DRYS ) Navios Maritime (NYSE: NM ) Eagle Bulk Shipping (Nasdaq: EGLE )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 2,541 members who have rated Diana believe the stock will outperform the S&P 500 going forward. These bulls include pbkirk and Teacherman1.

Last month , pbkirk tapped Diana as a tempting turnaround opportunity: "Shipping may well be in for a few years of hurt, but the global economy will recover, people will still need to get stuff from A to B. With it's relatively low debt, [Diana] looks well placed to survive and to grow at the expense of more leveraged competitors."

Diana's young dry-bulk fleet and rock-solid balance sheet continue to support its five-star CAPS status. In fact, Diana currently boasts a substantially lower debt-to-equity ratio (0.30) than DryShips (0.97), Navios (2.2), and Eagle Bulk (1.7), as well as Excel Maritime (NYSE: EXM ) (0.70) and Genco Shipping (NYSE: GNK ) (1.6).

Just last week, CAPS member Teacherman1 tapped Diana as a timely opportunity, to boot:

This is basically as low as it has been in the last 52 weeks. ...

They are making money, and 2010 was better than 2009, in which they also made money.

Their total debt is only about .33% of their total equity, and their cash and near cash assets, as of 9-30-2010, was just about equal to their total debt. ...

I think this is best in class among the Dry Bulk shipping companies, at least balance sheet wise, even if they are a little too conservative sometimes.

You might want to consider a small position, and watch to add on dips. In the longer term, this will go back up from here.

What do you think about Diana, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (3) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On January 05, 2011, at 10:52 AM, Imodelforartists wrote:

How long are your great and glorious know it all 170,000 experts going to preach to the choir about this POS? DSX & EGLE WHICH BOTH YOU PROMOTED LIKE A CARNIVAL SIDE SHOW BARKER these past 2+ year along with the , ahem, CAPS experts are not any more gonna pop than a deep rooted boil on the buttocks of an obese long haul trucker
Report this Comment On January 05, 2011, at 11:05 AM, FoolSolo wrote:

Diana is probably in the best position for a turnaround, but I just don't see the industry in general going anywhere for a year or two. Indeed, DSX is the pick of the crop, but this crop is anything but a bumper.
Report this Comment On January 05, 2011, at 12:21 PM, Randy3515 wrote:

(DRYS) is positioning itself as a diversified maritime industry favorite, adapting their focus toward oil platform and storage contracts. This diversification should respect and will eventually undermine its current fluctuations controlled by the Baltic Dry Index. Sure there are many new ships that are mostly Dry Carriers coming into play challenging to current price rates; however, these new ships will be faced with debt load on top of lower shipping prices. I believe (DRYS) is smart in that they are adapting not only as a dry shipper but also as a player in the offshore oil industry. Their recent purchase of oil platform ships was no mistake and they know exactly what they are doing. This news was recently followed by big contracts using these new ships within a few days.
Every trader knows the potential of a previously traded 100.00 a share stock now trading in the 5.00 range. Any little good news about (DRYS) along with improving market conditions will drive this stock forward. Sure fundamentals play a big role in the success of the stock and I believe (DRYS) is improving their fundamental value through diversification. Bottom line though in regard to trading the stock is that the potential reward of trading this stock out weighs fundamental value. I’m a day trader and understand the market is more and more each day being controlled by thousands of home traders that don’t have a clew about fundamentals. They do however know how to read the news.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 1417311, ~/Articles/ArticleHandler.aspx, 5/26/2012 5:30:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
	DOW	12,454.83	-74.92	-0.60%
	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes