No surprise that second largest shareholder sold. Bad news, good news, who knows? Strong stock price performance likely triggered added selling by the second largest shareholder. Even though the stock has been under pressure, the sale of the remaining 1.1 million share position at $48.50/share on October 5th is a positive event due to reduced overhang, higher public float and higher trading liquidity.Positive management call discussed global refinancing, variable dividend and buy backs. Catalyst for new capital allocation strategy was the global refinancing of all debt with a new five-year term $300 million loan and a $100 million revolver. The refinancing sets the stage for variable dividend policy equal to at least of 30% of the previous quarter's net income to start. The first dividend based on 3Q2021 results will be paid in November, and our dividend estimate is $22.6 million, or $1.73/share.Capital structure improving and stock buyback adds to capital allocation tool kit. After issuing equity to help finance acquisitions, the focus is shifting and a $50 million buy back program was established. While the global refinancing lowered liquidity into the $150 million range (revolver availability of $50 million and pro forma cash of $100 million) and variable dividends also lowers cash, the improved capital structure allows for buy backs too.No changes to 2021-22 EBITDA estimates. Our 2021 EBITDA estimate of $295.7 million is based on TCE rates of $23.7k/day; or EBITDA estimates of $95.9 million in 3Q2021 based on TCE rates of $29.4k/day and $105.6 million in 4Q2021 based on TCE rates of $28.0k/day. 2022 EBITDA estimate of $307.6 million is based on TCE rates of $23.9k/day. Recent weakness creates opportunity. Maintain Outperform rating and price target of $84/share. The successful global refinancing and the shift to variable dividends are major positives. Plus, the fleet renewal program has expanded the fleet to the highest level, which positions EGLE to capitalize on attractive dry bulk market fundamentals. We view the recent selling pressure following the exit of the second largest shareholder, down about 7% this week, as unwarranted and believe that the risk/reward profile remains attractive. Read More >>