Value Investor's Edge Live #37: Midsize Dry Bulk Surge: Insights From Eagle Bulk

Marketplace Roundtable

Gary Vogel, CEO of Eagle Bulk Shipping (EGLE), a dry bulk shipping company focused on the mid-sized segments, joined J Mintzmyer's Value Investor's Edge Live on 9 June 2021 to discuss the rapidly improving market outlook and company specific plans.
EGLE is benefiting from surging rates and is expected to report a blow out Q2 earnings report followed by an even stronger showing in Q3. Although market conditions can change and dry bulk is notoriously volatile, the supply side is the most bullish we have seen in 20+ years and the signals from demand are also encouraging. Gary talks through the markets in our interview as well as about capital allocation specifics and strategy for Eagle Bulk in particular.
This interview contains relevant insights for investors in all other dry bulk companies, including: 2020 Bulkers (Oslo: 2020), Diana Shipping (DSX), Eagle Bulk (EGLE), Eurodry (EDRY) Genco Shipping (GNK), Golden Ocean (GOGL), Grindrod Shipping (GRIN), Navios Partners (NMM), Pangaea Logistics (PANL), Safe Bulkers (SB), Seanergy Maritime (SHIP), and Star Bulk Carriers (SBLK).
Topics Covered
(0:00) Introductions and disclosures
(1:40) What is driving the steady strength in midsize dry bulk markets?
(4:15) What is the impact of the Australia-China coal shifts?
(5:30) Why are Capesizes far more volatile at this time?
(7:15) Why are 2022 FFAs still considerably below current market levels?
(9:30) Any activity or inquiries in the longer-term charter market?
(12:15) Discussion on rate hedging via derivatives.
(13:45) Capital allocation priorities? Target leverage?
(16:30) Commentary on ATM facility? Usage here?
(19:00) Potential for a dividend policy/program?
(21:00) Improving share liquidity? Lack of options trading?
(23:00) Potential for further sector consolidation?
(24:45) Impact from EEXI or tonnage tax?
(28:30) Current scrubber spreads? Plans to hedge savings?
(32:00) Discussion on proper benchmark for rates.
(34:15) What are the major risk factors at this point?
(38:30) When are potential newbuild yard slots available?
(40:30) Any desire to lock in 1-year rates yet?
(42:30) Why choose to invest in EGLE vs. peers?
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