5-Star Stocks Poised to Pop: Danaos

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, containership operator Danaos (NYSE: DAC) has earned a coveted five-star ranking.

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

Danaos facts

Headquarters	Piraeus, Greece
Market Cap	$235.7 million
Industry	Marine
Trailing-12-Month Revenue	$309.5 million
Management	President / CEO Dr. John Coustas CFO Dimitri Andritsoyiannis
Return on Equity (Average, Past 3 Years)	18.8%
Cash / Debt	$156.7 million / $2.55 billion
Other Highly Rated Shipping Stocks	Tidewater (NYSE: TDW) Frontline (NYSE: FRO)
CAPS Members Bullish on DAC Also Bullish on	Diana Shipping (NYSE: DSX) General Electric (NYSE: GE)
CAPS Members Bearish on DAC Also Bearish on	Citigroup (NYSE: C) Bank of America (NYSE: BAC)

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

On CAPS, 96% of the 482 members who have rated Danaos believe the stock will outperform the S&P 500 going forward. These bulls include All-Star fdude71, who is ranked in the top 3% of our community, and GrantQ.

Just last month, fdude71 tapped Danaos as a solid way to earn some future income: "The main concern is the debt level, but other CAPS members mention long term contracts on the existing ships … I'd rather keep it for the long run and see it shine when the economy picks up again and they return to paying a dividend."

In a pitch from two weeks later, GrantQ superbly details the Danaos bull case. Here's an excerpt:

- Either demand for shipping will increase, or competitors will go out of business. Either way, rates must go up. … This is the end of the trough for shipping rates. …
- [E]ven though waiting to make the loan commitments makes the future look uncertain, it also means they can probably negotiate better rates as the credit markets loosen up in the coming months/years. …
- Once the money to complete the build program is secured, the dividend can be re-instated. The dividend investors will come back to the stock.
...
This will take approx. 2 more years, but expect significant gains in the stock price as each of these 3 events occurs.

What do you think about Danaos, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!