2024-02-13 22:07:39 ET
Summary
- Global trade is facing a shift in trade patterns due to geopolitics and economics, potentially entering an era of "deglobalization.".
- Despite high short-term dividend yields, GSL has generated relatively limited free cash flows in the past 11 years as large replacement capex investments were needed.
- Global Ship Lease may face a potential decline in profitability and heightened uncertainty due to industry oversupply, and I do not see a strong value case for investing in the Company.
- If Asian shipyards are disrupted by the supply equation, GSL could be very interesting as it could face long-term improvements in the supply/demand equation.
Driven by geopolitics and economics, the world's trade routes are seeing a reshift not seen since the ascendancy of "Made in China". Some analysts such as Peter Zeihan even assert that we are entering an era of "deglobalization"....
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For further details see:
Global Ship Lease: Is 7% Dividend Yield Worth Given Cyclical Industry?