The recent news from the granddaddy of all shippers, Denmark’s AP Moller-Maersk, was not good – and investors in all the smaller container shipping companies were broadsided by it.
In early May, Maersk reported heavy first quarter losses, which “exacerbated fears about the industry’s future,” according to international shipping writer Robert Wright of the Financial Times. Many of the small cap container shipping companies, which had been moving higher with the market in the early months of 2012, saw investors flee on the news.
We last looked at small cap container shipping companies back in mid-January when a story on the growth in container handling in Los Angeles prompted hopes that it was an indicator of recovery, at least in the short term. Let’s look at how these companies compare now, as opposed to four months ago, and see if they have come back after the Maersk report.
Honolulu-based Alexander & Baldwin Inc (NYSE: ALEX; http://www.alexanderbaldwin.com/) is one of the larger US-based container shippers with 10 containerships in its Matson Line. ALEX containerships ply the waters between Asia, the Pacific Islands (Hawaii in particular) and the US west coast. Back then, ALEX had a market cap of $1.9 billion, stock price of about $44.89, and trading volume of more than 230,000 shares per day. Indeed, ALEX took a hit on the Maersk news, dropping down from about $52 to $48, but it has rebounded. It closed May 30 at $50.62, down 78 cents on the day and now has a market cap of more than $2.1 billion.
Athens-based Box Ships Inc* (NYSE: TEU: http://www.box-ships.com/) operates a fleet of seven containerships whose average age is only about four years, with two more vessels on order. TEU has a policy to pay substantially all of its operating cash flow out in dividends, minus the amounts required to maintain its operations, fleet and planned growth. In mid-January its stock price was about $8.40 and a market cap of about $132 million and average daily trading volume around 112,000 shares. It ran up to more than $9 until the Maersk report tanked the stock, sending it all the way down to about $7. At the close of market May 30, the stock price was back to $8, up 16 cents on the day, and its market cap is now about $130 million. Average volume is about 62,000 shares a day.
Athens-based Diana Containerships (Nasdaq: DCIX; http://www.dcontainerships.com/), with a total of nine vessels, is a sister of a drybulk carrier Diana Shipping. Back in January, its market cap was about $164 million, with trading volume of 128,000 shares per day, and a stock price of $7.10. At the close of market May 30, DCIX was trading at $7.10, down 4 cents on the day with a market cap still at $164 million. Trading volume is much higher, about 211,000 shares a day.
Athens-based Costamare Inc (NYSE: CMRE; http://www.costamare.com/) has a fleet of 59 containerships charted to shipping lines. Back in mid-January its market cap was about $900 million and stock price was about $15. At the close of market May 30, CMRE was trading at $13.41, down 27 cents on the day. Current market cap is about $909 million.
Piraeus-based Danaos Corporation (NYSE: DAC; http://www.danaos.com/), also has a large fleet of 57 containerships, with 8 more on order. Back in mid-January, its market cap was $363 million and it was trading at $3.33 on volume of about 32,000 shares per day. As of the close of the market May 30, DAC was trading for $4.03, up 1 cent on the day. Market cap is now about $442 million.
*Denotes a client of Allen & Caron, the publisher of this blog (though we do not trade their shares)