Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Danaos Corporation is a holding firm that also owns containerships internationally and rents out its ships to other liner companies. The company's main line of business is the purchase and management of ships. The vessel-owning firms, whose main business is the ownership and management of containerships managed by a company-related party, are how the Company carries out its activities.

1.2 The Key Positives, Negatives, and Investment summary

1.2 Key Metrics:

The greater profitability margin throughout the operational categories demonstrates that DAC has a higher profitability efficiency than its competitors. In addition, DAC has superior short-term liquidity to its competitors and a smaller debt-to-equity ratio, which indicates lesser balance sheet risk.

1.4 Top 10 shareholders:

• The top 10 shareholders together form ~58.88% of the total shareholding, signifying concentrated shareholding, Danaos Investments, Ltd., and Balyasny Asset Management LP are the biggest shareholders, holding the maximum stake in the company at ~44.49% and ~2.51%, respectively.
  

1.5 Consistent dividend History

DAC has been paying dividends from 2007 till 2009 but between the period of 2010 to 2020 the company reinvested the surplus money in the business and started distributing dividends again in 2021, DAC has a track record of consistent dividend payments with a current dividend yield of 5.40% higher than the US treasury yield. 

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY22:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 10, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Disclaimer 

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.