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Diversified Opportunities Report

Star Bulk Carriers Corp.

Jun 08, 2023

SBLK:NASDAQ
Investment Type
Small-Cap
Risk Level
Action
Rec. Price (US$)

Section 1: Company Overview and Fundamentals

1.1Company Overview:

Greek-based Star Bulk Carriers Corp. (NASDAQ: SBLK) operates internationally. Its fleet of dry bulk carrier boats is owned and operated by it. Major bulks including iron ore, coal, and grain are transported by the company's boats, as well as lesser bulks like bauxite, fertiliser, and steel goods. Its fleet comprises of 128 ships with 52,247 to 209,537 dwt carrying capacity. The fleet of the company consists of ships that range in size from Newcastlemax to Capesize to Panamax, Post Panamax, Kamsarmax, Ultramax, and Supramax, with a total carrying capacity of about 14 million deadweight tonnes (dwt) and an average age of almost ten years.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

  • The stock has corrected by 21.54% in the last three months as well as by 42.76% in past one year.
  • The stock is leaning towards its lower band of its 52-week range of USD 32.05 and 52-week low price of USD 16.85. Post the announcement of Q1FY23 results the stock corrected by around 4.16% due to lower rate of dry bulk freight across the global economies.
  • The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 43.81.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

These positive indicators suggest that SBLK has effectively managed its financial position by reducing its reliance on debt and improving its profitability. The lower debt/equity ratio signifies a stronger financial structure and reduced risk for the company. Additionally, the higher EBITDA margin indicates that SBLK is efficiently managing its costs and generating a greater return on its operating activities compared to its industry peers. This demonstrates the company's ability to optimize its operations and maximize its profitability. Overall, these favorable outcomes reflect SBLK's effective risk management and operational efficiency, positioning it well for future growth and stability.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~42.54% of the total shareholding, signifying diverse shareholding. Oaktree Capital Management, L.P. and Alliance Bernstein L.P. are the biggest shareholders, holding the maximum stake in the company at ~25.34% and ~6.54 %, respectively.

1.5 Freight Index Analysis:

The Baltic Dry Index is a measure of shipping rates for dry bulk commodities that indicates global demand for commodities and shipping capacity. It has historically been correlated with the share price of SBLK, a shipping company. When the BDI index price is high, SBLK's earnings and share price may be positively impacted due to strong demand and potentially higher shipping rates. Conversely, when the BDI index price is low, SBLK's earnings and share price may be negatively affected. Recently, the BDI index has increased following a low point in mid-February, which may indicate a positive financial announcement for SBLK's Q2FY23.

 

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY22:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary: 

Stock Performance:

  • The stock has corrected by 21.54% in the last three months as well as by 42.76% in past one year.
  • The stock is leaning towards its lower band of its 52-week range of USD 32.05 and 52-week low price of USD 16.85. Post the announcement of Q1FY23 results the stock corrected by around 4.16% due to lower rate of dry bulk freight across the global economies.
  • The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 43.81.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 07, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.


Disclaimer-

Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.