Danaos Shares Popped: What You Need to Know (DAC)

Danaos Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of containership operator Danaos (NYSE: DAC ) surged 13% today in intraday trading on extraordinarily high volume.

So what: At the time of publication, more than 350,000 shares of Danaos have already changed hands, versus its average volume of roughly 55,000 shares. I couldn't find any company or industry-specific news driving today's heavy rally -- close rival Seaspan (NYSE: SSW ) is only up 2% -- but when you consider the stock's beta of almost two, big one-day price swings shouldn't come as that big of a surprise.

Now what: Don't let today's pop keep you from looking into Danaos. Even with the double-digit rally, Danaos shares are still down about 25% from the 52-week highs set just a couple of months ago and trade at a cheapish forward P/E of 6.3. Of course, given Danaos' heavy debt load and highly volatile nature, the opportunity is probably more suitable for less risk-averse Fools.

Interested in more info on Danaos? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended creating a written covered straddle position in Seaspan, and The Motley Fool owns shares of it. Try any of our Foolish newsletter services free for 30 days.

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