ZIM - Danaos: Just Far Too Cheap It's A Buy
2024-02-09 23:54:10 ET
Summary
- DAC is trading at half its tangible book value despite being net debt free and having almost $50/share in earnings contracted for 2024-2025.
- DAC has paid down so much debt, its Enterprise Value is back to the COVID lows.
- Negative sentiment from an oversupplied container shipping industry is weighing on sentiment and DAC's share price.
- DAC Management has done a great job over the last few years and deserves more credit for their capital allocation.
- Continued earnings and cash flow, along with share repurchases, could narrow the discount to book value and push the share price higher over the next year.
The shipping industry doesn't generate a lot of excitement for most investors. Even within the shipping sector, containerships are a particularly unfavored industry right now as the boom of 2021-2022 resulted in a too many additional ships being ordered, which are just beginning to hit the water now....
Danaos: Just Far Too Cheap, It's A Buy