Diana Shipping’s (DSX) fleet of 35 dry-bulk vessels is employed primarily on medium to long-term time charters and transports a range of dry bulk cargoes including iron ore, coal and grain.
Those charter commitments add stability, but the company is writing new business, too, and those new contracts will enable DSX to take advantage of appreciation in spot rates. For instance, last month, Diana inked a new charter deal with mining conglomerate Rio Tinto (RIO).
DSX is expanding its fleet prudently, too. Earlier this month, it acquired the MV Stefania Lembo — a 2010-built Kamsarmax dry bulk vessel — at auction for a purchase price of $22.7 million. Diana also plans to take delivery of two new Ice Class Panamax dry bulk vessels between the Q4 2013 and the Q1 2014.
DSX has one of the sector’s strongest balance sheets and as a dry bulk pure play stands to gain most from the factors that are driving up the Baltic Dry Index — specifically, stronger iron ore production and exports from Australia, continued growth in China’s steel production and stronger grain shipments.
Also, Diana’s $1 billion market cap is notable considering the lion’s share of shipping stocks are measured in hundreds of millions or even tens of millions.