Friday, November 13, 2015

Buying and Selling a Stock: Part 7

I haven't bought any stock in the stock market, outside of my retirement accounts in two years, until last week. DHT Holdings, the stock that I found back in 2012 is starting to do really well again. In fact, so well that I bought a couple hundred more shares.

For starters, after lackluster earning the last three years because of a downturn in the oil shipping market they had less business, that seems to be turning around. Also, they were involved in building new ships, which is very expensive.

In short, this is going to be their best year in a while. Their most recent quarterly report was very positive. The recent earnings transcript was positive too. To add to it, the management owns far more shares than I do, so they have a vested interested in the company doing well, and it's mostly the same people there now that it was back in February 2012 when I learned of the company.

You should certainly do your own research, listening to me is a sure fire way to lose money. However, the DHT's price to earnings ratio is 7. Their dividend payout is higher than 8% at the current stock price just above $7.00 per share. Their price to book ratio is close to 1, which means what you pay for is what you get, not the hope of assets to come. On the down side they have a fair amount of debt, because they recently built some new ships. However, that's the best part. Of the six new ships they have bought, one is scheduled to hit the water in November and the next in January. Which means, they have been paying and paying money to build these multimillion dollar ships, and now they are about to start making money.

In my estimation it all adds up to an undervalued stock price.


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