Shipping is a tough and cyclical sector. Companies such as Star Bulk Carriers Corp. (SBLK) can hope for the best, but they must be prepared for the worst. SBLK is always well prepared for an extended down-cycle. This is done by maintaining a strong balance sheet with excellent liquidity, low-cost operations and staggered debt maturities.
While shipping can have vicious and extreme downturns that eliminate weaker players, there are also joyful periods of profitability when rates soar. Sometimes this transition happens quite fast and unexpectedly. Things looked very bleak as the Baltic Dry Index bottomed