Fleet renewal starts with two new builds. Contracts signed for two Eco design fuel efficient 2,800 TEU containerships to be built at Hyundai Mipo Dockyard Co. in Korea at a total cost of approximately $76 million. We estimate that deposits should total about 20% in 2021 and a combo of debt and equity financing will be utilized to fund the new builds.Marine Money Week container panel and high container charter rates bolsters outlook. ESEA CAO Symeon Pariaros participated on the Marine Money Week container panel last week entitled "The Containership Supply Squeeze" and confirmed that container vessel availability remains tight. Higher container rates are positive for upcoming charters, and the prospects remain strong for the upcoming renewals on four feeders and one intermediate that expire before yearend 2021. The feeders (Spetses/Diamantis/Corfu/Evridiki) should secure longer term work at charter rates in the $20.0k-$25.0k/day range. At the same time, charter rates for the Oakland, an intermediate, appear to have moved up into the more than $40.0k/day range. Based on recent comments, our estimates might be conservative.Visibility into next year is the highest in more than a decade. No change in 2021 EBITDA estimate of $44.1 million based on forward cover of 89% and TCE rates of $17.4k/day. No change to 2022 EBITDA estimate of $69.7 million based on forward cover of 55% and TCE rates of $22.3k/day.Capital structure improving due to stronger cash flow. Debt of $0.9 million was prepaid in May, the convertible preferred stock is deep in the money, and net debt might be close to zero by yearend 2022 even after the two new builds. With improved visibility and a stronger capital structure, a regular dividend or special dividend could be considered by yearend 2021.Maintain Outperform rating and price target of $30.00/share. Our container market outlook remains favorable and new charters with longer terms at higher rates have created solid forward cash flow visibility. Even though the stock is up 325% this year and 47% in June, we believe that the current valuation remains attractive and the risk/reward profile warrants a positive rating. Moreover, improving operating results and declining financial leverage should allow shareholder friendly moves, like paying a regular and/or special dividend. Read More >>