A strong rally in the dry bulk shipping sector over the past several months has led many investors to companies like Safe Bulkers (NYSE: SB). But before you hop on board, don't ignore one very big warning sign. Several related-party transactions are funneling millions of shareholder dollars into businesses privately owned by Safe Bulkers' CEO.
In 2012 alone, the CEO of Safe Bulkers steered $7.7 million from the company's coffers into several companies he owns. But even while Safe Bulkers' revenues decreased by 10% since 2008, payments to the CEO's private businesses have risen by 80% during the same period. This is just one such sign of worry behind related-party transactions at the company.
In the video below, Motley Fool analyst Blake Bos explains exactly what a related-party transaction is, what kinds of transactions are taking place at Safe Bulkers, and whether investors should care about them.
