Danaos Corp DAC has released their 1st quarter numbers and the press release is linked above. Reading the DAC report is like deja vu all over again. It looks a lot like fellow container shipper Seaspan Corp [[SSW]. Both appear to have good long term contracts for most if not all of their vessels to continue to provide steady cash flow and some level of profitability. Both have a large book of new build orders that they say are already contracted, but the still need to get financed and put in service.
Overall, however Seaspan seems to be in better shape financially and continue to pay a dividend (though reduced by 80%). Danaos is in noncompliance with their loan covenants due to collateral values.
Overall, the container market is grim these days with port numbers off 20% to 25% in most places. However, DAC and SSW both look like they are building for an economic recovery. I just hope they do not hit a big wave along the way.
One Comment
Monday’s open (5/4) and price action should prove to be a pivotal point for DAC, up for test are the long and short term technical support criteria.
Basically, if the price can prove support by maintaining or increasing from yesterday’s close and then hold steady at or above that level, short term support will be proven.
Always remember, capital preservation is job #1. If a stock unexplainedly looses three consecutive days, I usually will exit and ask questions later.