2Q2021 EBITDA of $50.6 million and TCE rates of $21.1k/day in line with estimates. Call with management today at 8:30am EST and number is 323-289-6581. Three new Ultra acquisitions and another Supra sale were announced. Also, a new $450 million credit facility (term loan of $150 million and revolver of $300 million) has been lined up. We expect the call will highlight solid 3Q2021 forward cover and good progress on shifting toward the new capital allocation strategy that includes paying variable dividends in 1Q2022.Increasing 2021 EBITDA estimate to $203 million based on TCE rates of $20.7k/day from $200 million and TCE rates of $20.2k/day. 3Q2021 forward cover is high with Capes 66% booked at $31.3k/day and Ultras/Supras 75% booked at $25.3k/day. Three new time charters signed, but visibility is limited beyond one quarter out. Increasing FY2022 dividend estimate to $3.05/share from $2.90/share, which is driven by our higher 2022 EBITDA estimate of $226 million based on TCE rates of $21.6k/day, up from $216 million and TCE rates of $21.7k/day.Fleet renewal program remains active. After lining up three Ultra acquisitions for $78.5 million in 2Q2021, another three Ultra acquisitions for $71.0 million were announced yesterday. Also, one Supra was sold for ~$8 million in July and the oldest 2004-built Supra will be sold for $13.3 million in 4Q2021. Pro forma for pending transactions, the fleet will total 44, or 17 Capes, 15 Ultras and 12 Supras. Despite added Ultra acquisitions, net debt should drop into $191 million range in 4Q2021. Recent shelf filing adds flexibility to the tool kit and we see no indication that equity issuance is imminent given the current outlook.Maintain OUTPERFORM rating and price target of $28. The dry bulk market outlook remains favorable due to firm demand and low supply growth. The reception to a variable dividend policy has improved, and the fleet renewal program, upside Cape optionality, and higher public float are positives. While the stock has responded to firmer dry bulk market fundamentals and is up 138% this year, including 37% in 1Q2021 and 87% in 2Q2021, the stock is down 9% in 3Q2021 and we view the current risk/reward profile and upside potential as attractive. Read More >>