Nothing can make tomorrow's leaders stand apart from the pack quite like a knack for exhibiting grace under pressure. This can apply to companies as well, and given the challenging economic environment, I consider this an important means by which to pinpoint tomorrow's outperformers amid the wasteland of seemingly inexpensive stocks.
I try to steer entirely clear of sectors that are structurally impaired and show little indication of improvement on the horizon. I warned investors to run from the mortgage lenders like Bank of America
But for whatever reason, I seem to have ignored my own guidelines when it comes to the dry bulk shippers. Talk about structural impairment; the persistent oversupply of bulk cargo vessels worldwide makes the U.S. housing inventory appear tame by comparison! Bank of America may have well-earned my designation as the worst stock for 2010, but let's recall that I considered DryShips
In select operators like Diana Shipping
Genco exhibited tremendous grace under pressure by delivering a $1.6 million profit during the third quarter amid some of the more disastrous market conditions one can imagine. This despite an average daily charter rate that plummeted nearly 39% to $16,447! And following several very difficult years for the industry at large, here stands a company with a cash position of $301.5 million -- more than the company's entire market capitalization!. Genco's total long-term debt stands at a rather substantial $1.75 billion, but Genco's capacity to operate profitably through this unseemly charter-rate environment leaves me confident that Genco will first survive, and then thrive.
Genco subsidiary Baltic Trading
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. For better or for worse, he owns shares of Baltic Trading, Diana Shipping, and DryShips. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.