Sunday, November 17, 2013

Knightsbridge Tankers Limited (VLCCF) - shipping company with sustained high dividends

Though this company has a word "tankers" in its name, these days it has nothing to do with the tanker sectors. Presently Knightsbridge's fleet comprises four Capesize dry bulk carriers. What is more, most recently, the company has concluded two contracts for building two Capesize vessels additionally.
Another very important event in the company's history was a new shares offering which brought $51 million in cash. In my opinion this offering has stabilised the financial situation of the company, which operates on a very fragile dry bulk sector.

This week Knightsbridge has published its quaterly report. Just a few numbers:

                                                                             source: Simple Digressions

As you can see, the results improve with Capesize spot rates going up.
But the most important thing is that the company's high dividend yield (presently 9.0%) seems to be sustainable. The new offering, stabilising the company's fundamental situation, is another beneficial factor supporting that thesis.

Now let us look at the chart:


Currently, after announcing the new offering, we observe the strong price correction. The inflection point seems to be around $8.5 - $9.0 where many shares have changed hands. See another chart below:


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