ESEA - Euroseas Does Not Qualify For Long-Term Holding Because Of Debt Risks
2024-02-09 01:15:52 ET
Summary
- Euroseas is a containership owner and charter that has seen its stock price double and increase profits and distributions.
- Breakeven costs have not improved, and the company's debt adds a risky component that could impact its ability to survive low charter rates.
- ESEA has locked in high-price contracts until 2025, but in the long term, charter rates are expected to trend towards spot rates, which can be low for extended periods.
Euroseas ( ESEA ) is a Marshallese-based, Greek-managed containership owner and charter.
I wrote about the company in August 2022 and January 2023 . Both times, I analyzed the company from a breakeven perspective, comparing the breakeven numbers with historical charter rates. Both times, I considered ESEA to be a risky investment in the long term (across the cycle)....
Euroseas Does Not Qualify For Long-Term Holding Because Of Debt Risks