Mar 02 2008
ESEA: Euroseas Up Nicely On Earnings, Dividend, Upgrade, But Looking for More
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ESEA, a drybulk and container shipper, came out with better than expected $0.51/share earnings Thursday after the close. They also announced an increase in their annual dividend from $0.79 to $1.08 per share. At least one broker has upgraded the company from Hold to Buy and given it a $20 price target. It closed Friday at right about $14.
ESEA bottomed at $8.33 during the January sell-off and has been climbing fairly steadily ever since. The first spurt took the stock to $12.50, which was an important level from before the January fall. After a short pull-back, the next surge took that point out too then settled in for a consolidation in the $13.00-13.50. Friday ESEA has broken through the top of that range, which is a very positive development. The next significant level for the stock is near $16.75 where a quick rally in late November stalled out.
The interesting part of this whole picture is the valuation side of things. ESEA is trading at about 8 times trailing earnings. Current estimates put 2008 EPS at $1.87. That will likely be adjusted up soon as analysts work the strong future outlook expressed by the company into their forecasts. Even at current levels, though, we’re talking only about a 7 forward looking EPS. The five year average is 5-12, so with slightly better than currently forecast earnings and a little multiple expansion, the aforementioned $20 target certainly looks reachable.
Oh, and it’s currently yielding right about 8%. Talk about an attractive outlook!
Here are some other posts which might interest you:
- ESEA: Quick update
- LPHI: Life Partners Could See 55 and Up
- Tales of My Trading Mentor - Dec. Cotton
- ESEA: Getting Some Support for My View
- Today’s Trading Look-Back - March 10, 2008
[...] If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!It’s taken about 6 weeks and a bit of a sell-off in between, but apparently some folks have finally seen what I was looking at - fundamentally - in ESEA. Word has it that Zacks Investment Research put out a note yesterday saying the stock was undervalued. They missed getting in at $11-$12, but I won’t get on them too much for that. I was a bit early with my own analysis. [...]