Staying positive on Cape market. Cape TCE rates have moved higher due to firm demand based on infrastructure projects and global stimulus programs plus port congestion and coal shortages. At the same time, the order book remains muted, and the January 1, 2023 implementation of new carbon emission regulations (EEXI) could trigger slow steaming that effectively lowers supply. Volatility likely to continue and seasonality should be expected, but Cape TCE rates have been higher than expected.Increasing 2021 EBITDA estimate to $90.5 million from $75.2 million based on TCE rates of $26.9k/day, up from $23.9k/day mainly due to higher 4Q2021 outlook. Limited change to our 3Q2021E EBITDA of $31.0 million and TCE rates of $31.0k/day. We had been factoring in typical seasonality, but the quarter has started strongly. 4Q2021 visibility has improved with forward cover of >50% with eight Capes fixed at a TCE rate in the ~$32.0k/day range, so we are increasing our 4Q2021E EBITDA to $35.0 million based on TCE rates of $35.0k/day.Increasing 2022 EBITDA estimate to $97.5 million based on TCE rates of $24.5k/day up from $91.0 million based on TCE rates of $23.4k/day. Visibility is limited with only three Capes fixed at a TCE rate north of $30.0k/day, or forward cover of ~20% of available days, but firmer 2H2021 should extend into next year. We have factored in some typical seasonality, but are still increasing our 2022E EBITDA. Operating leverage has expanded; each $1.0k/day change in Cape TCE rates has a $5.5 million EBITDA impact.Financial leverage moderating and financial flexibility improving. Buy back program not active yet since retiring convert debt should be highest priority since it is convertible at $1.20/share, but regular and/or special dividend seems likely now.Maintain Outperform rating and increasing price target to $1.85/share from $1.70/share. As highlighted in the mid-September virtual NDR, the expanded Cape fleet and improved financial position create a more stable operating platform. While the lack of buy backs might disappoint some investors, refinancing convert debt and paying a dividend are higher priorities at the current stock price. While the stock is up 165% this year, the risk/reward profile remains very favorable. The fleet expansion and a bias toward time charters with indexed rates should help capture upside rate optionality and lower financial leverage by yearend 2021. Read More >>