1Q2021 EBITDA of $6.5 million was ahead of our estimate is $5.7 million due to higher average TCE rates of $16.2k/day. TCE revenue of $15.1 million was $0.9 million higher due to a positive rate variance and opex of $5.6 million was about $0.5 million lower than expected, which more than offset higher G&A expense of $2.7 million.Fine tuning 2021 EBITDA estimate to $81.4 million based on TCE rates of $24.9k/day versus our prior estimate of $77.1 million based on TCE rates of $26.8/day to reflect 1Q2021 results, updated forward cover and the timing of the pending acquisitions. 2Q2021 forward cover is high at 96% of available days booked at an average TCE rate of $22.4k/day. Please note that the average TCE rate is a blend of 455 days fixed at $14.7k/day and 598 days at $28.3k/day based on the FFA curve. While five Capes fixed on FFAs will dampen 2Q2021 operating results, five Capes have been fixed with FFAs at higher rates in 3Q2021 (four at $25k/day and one at $33k/day) and the new one-year time charter at $31.0k/day on the Patriotship starts in late June.Acquisitions move pro forma Cape fleet to 16. A 2012-built Cape, the Worldship, will be acquired for $33.7 million in 3Q2021. Combined with the Tradership and Patriotship, recent acquisitions total $134.3 million. Debt/lease financing of $48 million has closed and additional lease financing plus existing cash should fund the remainder of the acquisition cost.Financial position stabilized and acquisition financing largely locked in. Cash increased to $58.1 million from $23.7 million due to capital raises and acquisition deposits were $22.0 million. As a result, total debt/leases dropped to $170.2 million from $208.5 million so net debt dropped to $112.1 million from $184.8 million. Financing activity has picked up this quarter and several financings recently closed to generate about $48 million to fund acquisitions. The remaining $86.3 million should be funded with a lease financing of $30.9 million on the Hellaship and Patriotship and existing cash of $55.4 million.Maintain Outperform rating and price target of $1.50/share. The risk/reward profile remains favorable, especially after the 4% drop in 2Q2021 to date. The Cape 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 >>