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Imminent Dividend Cut At Diana Containerships

Published Thu, 07 Mar 2013 16:59:37 -0500 on Seeking Alpha

I warned investors of the apparent overvaluation of Diana Containerships (DCIX) last month when the stock traded at $7 ($6.70 dividend-adj). In my article, I outlined my overall valuation approach and gave DCIX a price target of approximately $4.05. I emphasized that the dividend was not sustainable for the near future. In respect to market realities and the recent Q4-12 report, other analysts are also lowering their targets, albeit not as much, with a recent Jefferies note lowering the target to $7 (from $8). This article will offer commentary on the Q4-12 results, discuss the dividend impact of the new Sagitta charter, and provide target dates for interested investors. Q4-12 Results & TCE The most notable figure in the Q4-12 results is the jump in cash-breakeven TCE to $12,800, up from $11,900 last quarter. This jump appears to be primarily due to increases in operating expenditures.... Read more