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Reasons to like Paragon Shipping (PRGN)
5/25/2009 12:51:30 PM | Thomas Englebert, SmallCapReview.com
48631 Reads

Price to earnings ratio is ridiculously low

In March we brought you Star Bulk Carriers (NASDAQ: SBLK, Stock Forum) at $1.82 and the stock now trades upwards of $4.14 and is looking for more.

Shipping rates were at an all-time high in June of '08 and subsequently fell to a six-year low. The Baltic Dry Index (BDI), which represents the daily average of prices to ship raw materials, has been steadily moving off its lows. Many consider the BDI as the leading indicator of forthcoming global trade.

With prices now on the rebound the entire sector stands to benefit. In an industry where many have suspended dividends, one company, Paragon Shipping (NASDAQ: PRGN, Stock Forum), continues to deliver, announcing a quarterly dividend of five cents per share, payable on June 9, 2009, to shareholders of record as of May 29, 2009. 

In addition, the company has a share repurchase program of up to an aggregate of $20 million of its common shares, through December 31, 2009. The number of shares short has been reduced from 876K to 191K in the past month.

The price to earnings ratio is ridiculously low at 1.85; the industry average, itself very low is around 5 and the company is currently sporting a one-year price target price of $11.01.

For the remainder of '09 Paragon Shipping says that it has booked 95% of its capacity. 

All things considered, Paragon Shipping appears to be a relatively safe play, if such a thing exists, in what is a volatile sector.

Paragon Shipping is a global shipping transportation company specializing in drybulk cargoes. Its vessels are able to trade worldwide in a multitude of trade routes carrying a wide range of cargoes covering a number of industries, including iron ore, coal, grain, bauxite, phosphate, and fertilizers. The fleet carrying capacity totals 765,137 deadweight tons.

The company reported net income of $19.2 million, or 71 cents per basic and diluted share, for the first quarter of 2009. Adjusted net income for the first quarter of 2009 was $14.7 million, or 54 cents per basic and diluted share. Time charter revenue for the first quarter of 2009 was $41.6 million, compared to $40.5 million for the first quarter of 2008.

The company operated 12 vessels during the first quarter of 2009, earning an average time charter equivalent rate or TCE rate, of $37,179 per day, compared to an average of 11 vessels during the first quarter of 2008, earning an average time charter equivalent rate of $39,098 per day.

 

For the latest in small cap news visit our site Here 

SCR has not been compensated and holds no position as of the date of this report.
ABOUT THE AUTHOR
Thomas Englebert, SmallCapReview.com

Thomas Englebert is Editor/Founder of www.SmallCapReview.com, a leading site for news on small-cap stocks since 1999. SmallCapReview has built a loyal opt-in following for their investor products by providing a newsletter at no cost, sent to subscribers, highlighting select small-cap stocks. To register, visit http://www.smallcapreview.com/subscribe.htm. To contact the author email: editor@smallcapreview.com.

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