Cantor Fitzgerald

Natasha Boyden Comments: Solid War Chest - Trade Winds Online

Trade Winds Online, November 11, 2009

Diana Shipping will have an easy time wading into the sale-and-purchase market as its war chest continues to grow, analyst suggested Tuesday.

Cantor Fitzgerald's Natasha Boyden said the New York-listed bulker owner could 'comfortably' purchase 10 panamax or capesize bulker, growing its fleet by 50%.

She estimates that Greece's Diana will have a cash balance of $270m, while Lazard Capital Markets analyst Urs Dur estimated that Diana's balance will hit $300m by the end of the second quarter of next year.

'Diana can afford to grow at a moment's notice and does not face any debt covenant issues, unlike much of its competition,' Dur said in a note to clients.

As TradeWinds reported earlier Tuesday, Diana chief executive Simeon Palios said the owner of 20 bulkers and a newbuilding plans to purchase vessels over the next two years. The news came as the company reported quarterly profits of $28.7m, above analyst estimates.

Palios said in a conference call with analysts that the company could buy up to nine bulkers, picking up one at a time.

'We are encouraged by this expansion strategy, as it does not force [Diana] to time the exact bottom of the market, and instead allows the company to average down on vessel values,' Boyden said of the two-year time frame.

Diana's shares rose by 1% Tuesday to hit $14.30 in late-session trading on the New York Stock Exchange.