Global Ship Lease. (NYSE–GSL)
Price November 10, 2015-$3.68
We have been personally buying many yield stocks over the last 2-3 years. GSL is a high yield ship leasing company that has gone through some tough times but seems to have come out on top.
GSL started out as a merger entity that bought the shipping business back in 2008ish. It was paying out a nice dividend and then 2009 happened. Although their operations have really never skipped a beat, their banks did. As the price of ships fell, they ran into loan covenant problems and ended up having to suspend their dividend.
In 2015 they were able to refinance their debt (albeit at pretty high rates) and began paying a dividend again. They are looking at increasing the dividend next quarter to $.50 a share.
Their latest earnings were for 9/30/2015 (Q3) and were very nice. Revenues were $42 million up from $34 million last year and adjusted EBITDA was $28 million versus $20 million. They only have one ship coming off lease over the next 2 years.
We normally don’t recommend these kind of stocks but we think this has 50% upside and a 10% + dividend while we wait.
GSL has about $490 million of debt.
There are about 48 million shares outstanding and it trades only about 85,000 shares a day.
About GSL: Global Ship Lease is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to top tier container liner companies.
At September 30, 2015, Global Ship Lease owned 20 vessels with a total capacity of 90,538 TEU and an average age, weighted by TEU capacity of 11.4 years. 19 vessels are currently fixed on time charters, 15 of which are with CMA CGM. The average remaining term of the charters is 4.8 years or 5.1 years on a weighted basis, excluding Ville d’Aquarius, which is charter-free and is to be sold, and Ville d’Orion, which is deployed in the short-term charter market.