Intrinsic value of Diana Containerships - DCIX

Previous Close

$0.48

  Intrinsic Value

$0.07

stock screener

  Rating & Target

str. sell

-86%

  Value-price divergence*

+38%

Previous close

$0.48

 
Intrinsic value

$0.07

 
Up/down potential

-86%

 
Rating

str. sell

 
Value-price divergence*

+38%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DCIX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -46.77
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  33
  34
  34
  35
  36
  37
  39
  40
  41
  43
  45
  46
  48
  50
  52
  55
  57
  59
  62
  65
  68
  71
  74
  78
  82
  86
  90
  94
  98
  103
  108
Variable operating expenses, $m
 
  40
  41
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  77
  80
  84
  88
  92
  97
  101
  106
  111
  116
  122
  128
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  175
  40
  41
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  77
  80
  84
  88
  92
  97
  101
  106
  111
  116
  122
  128
Operating income, $m
  -142
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
EBITDA, $m
  -129
  7
  7
  7
  8
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
Interest expense (income), $m
  7
  6
  6
  7
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
Earnings before tax, $m
  -149
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -149
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  267
  265
  271
  278
  286
  295
  304
  314
  326
  338
  351
  365
  379
  395
  412
  430
  448
  468
  489
  512
  535
  560
  586
  614
  643
  673
  706
  740
  775
  813
  852
Adjusted assets (=assets-cash), $m
  259
  265
  271
  278
  286
  295
  304
  314
  326
  338
  351
  365
  379
  395
  412
  430
  448
  468
  489
  512
  535
  560
  586
  614
  643
  673
  706
  740
  775
  813
  852
Revenue / Adjusted assets
  0.127
  0.128
  0.125
  0.126
  0.126
  0.125
  0.128
  0.127
  0.126
  0.127
  0.128
  0.126
  0.127
  0.127
  0.126
  0.128
  0.127
  0.126
  0.127
  0.127
  0.127
  0.127
  0.126
  0.127
  0.128
  0.128
  0.127
  0.127
  0.126
  0.127
  0.127
Average production assets, $m
  315
  321
  328
  337
  346
  357
  368
  381
  394
  409
  424
  441
  459
  478
  498
  520
  543
  567
  592
  619
  648
  678
  710
  743
  778
  815
  854
  895
  938
  984
  1,032
Working capital, $m
  -107
  12
  13
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
  38
  39
Total debt, $m
  173
  169
  173
  177
  183
  188
  194
  201
  208
  216
  225
  234
  243
  253
  264
  276
  288
  301
  315
  329
  344
  360
  377
  395
  414
  434
  455
  477
  500
  525
  550
Total liabilities, $m
  176
  172
  176
  180
  186
  191
  197
  204
  211
  219
  228
  237
  246
  256
  267
  279
  291
  304
  318
  332
  347
  363
  380
  398
  417
  437
  458
  480
  503
  528
  553
Total equity, $m
  91
  93
  95
  98
  100
  103
  107
  110
  114
  119
  123
  128
  133
  139
  145
  151
  157
  164
  172
  180
  188
  197
  206
  215
  226
  236
  248
  260
  272
  285
  299
Total liabilities and equity, $m
  267
  265
  271
  278
  286
  294
  304
  314
  325
  338
  351
  365
  379
  395
  412
  430
  448
  468
  490
  512
  535
  560
  586
  613
  643
  673
  706
  740
  775
  813
  852
Debt-to-equity ratio
  1.901
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.820
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.830
  1.840
  1.840
  1.840
  1.840
  1.840
  1.840
  1.840
  1.840
Adjusted equity ratio
  0.320
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -149
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40
Depreciation, amort., depletion, $m
  13
  13
  14
  14
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
Funds from operations, $m
  -14
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
Change in working capital, $m
  -2
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
Cash from operations, $m
  -12
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Maintenance CAPEX, $m
  0
  -13
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
New CAPEX, $m
  0
  -6
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
Cash from investing activities, $m
  11
  -19
  -20
  -22
  -23
  -24
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -43
  -44
  -46
  -49
  -51
  -54
  -57
  -60
  -62
  -66
  -69
  -73
  -76
  -80
  -84
  -89
Free cash flow, $m
  -1
  -19
  -20
  -21
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -75
  -79
  -83
  -87
Issuance/(repayment) of debt, $m
  -19
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  26
Issuance/(repurchase) of shares, $m
  0
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  49
  51
  53
Cash from financing (excl. dividends), $m  
  -20
  18
  19
  20
  21
  23
  24
  25
  26
  28
  29
  31
  33
  34
  36
  38
  39
  42
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
  75
  79
Total cash flow (excl. dividends), $m
  -21
  0
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
Retained Cash Flow (-), $m
  148
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -53
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -53
Discount rate, %
 
  11.20
  11.76
  12.35
  12.97
  13.61
  14.29
  15.01
  15.76
  16.55
  17.37
  18.24
  19.16
  20.11
  21.12
  22.18
  23.28
  24.45
  25.67
  26.95
  28.30
  29.72
  31.20
  32.76
  34.40
  36.12
  37.93
  39.82
  41.81
  43.91
  46.10
PV of cash for distribution, $m
 
  -13
  -12
  -11
  -10
  -9
  -8
  -7
  -6
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  91.8
  84.3
  77.2
  70.7
  64.6
  59.0
  53.8
  49.1
  44.7
  40.7
  37.0
  33.6
  30.5
  27.7
  25.2
  22.8
  20.7
  18.8
  17.0
  15.4
  14.0
  12.7
  11.5
  10.4
  9.4
  8.5
  7.7
  7.0
  6.3
  5.7

Diana Containerships Inc. is a holding company. The Company, through its subsidiaries, is engaged in the ownership of containerships. As of December 31, 2016, the Company's fleet consisted of six panamax and six post-panamax containerships with a combined carrying capacity of 61,517 twenty-foot equivalent unit (TEU). As of December 31, 2016, the Company's fleet included SAGITTA, CENTAURUS, NEW JERSEY, PAMINA, DOMINGO, DOUKATO, PUELO, PUCON, MARCH, GREAT and HAMBURG. The Company's customers include national, regional and international companies. The Company charters its vessels to customers primarily pursuant to short-term and long-term time charters. As of December 31, 2016, its subsidiaries included Likiep Shipping Company Inc., Orangina Inc., Rongerik Shipping Company Inc., Dud Shipping Company Inc., Mago Shipping Company Inc., Eluk Shipping Company Inc., Oruk Shipping Company Inc., Meck Shipping Company Inc., Langor Shipping Company Inc. and Unitized Ocean Transport Limited.

FINANCIAL RATIOS  of  Diana Containerships (DCIX)

Valuation Ratios
P/E Ratio -0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow -0
Price to Free Cash Flow -0
Growth Rates
Sales Growth Rate -46.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 50.5%
Total Debt to Equity 190.1%
Interest Coverage -20
Management Effectiveness
Return On Assets -40.4%
Ret/ On Assets - 3 Yr. Avg. -13.6%
Return On Total Capital -42.9%
Ret/ On T. Cap. - 3 Yr. Avg. -15.4%
Return On Equity -90.3%
Return On Equity - 3 Yr. Avg. -32%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 48%
EBITDA Margin -390.9%
EBITDA Margin - 3 Yr. Avg. -118%
Operating Margin -430.3%
Oper. Margin - 3 Yr. Avg. -143.2%
Pre-Tax Margin -451.5%
Pre-Tax Margin - 3 Yr. Avg. -158.3%
Net Profit Margin -451.5%
Net Profit Margin - 3 Yr. Avg. -158.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DCIX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DCIX stock intrinsic value calculation we used $33 million for the last fiscal year's total revenue generated by Diana Containerships. The default revenue input number comes from 2016 income statement of Diana Containerships. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DCIX stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.2%, whose default value for DCIX is calculated based on our internal credit rating of Diana Containerships, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Diana Containerships.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DCIX stock the variable cost ratio is equal to 118.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DCIX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.8% for Diana Containerships.

Corporate tax rate of 27% is the nominal tax rate for Diana Containerships. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DCIX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DCIX are equal to 953%.

Life of production assets of 24.2 years is the average useful life of capital assets used in Diana Containerships operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DCIX is equal to 36.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $91 million for Diana Containerships - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 337.748 million for Diana Containerships is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Diana Containerships at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
DSX Diana Shipping 4.03 2.33  sell
ESEA Euroseas 1.85 1.81  buy
DAC Danaos 1.45 3.65  str.buy
CMRE Costamare 6.14 6.18  hold
GSL Global Ship Le 1.40 1.54  buy
GLBS Globus Maritim 0.940 0.19  str.sell
SHIP Seanergy Marit 1.22 2.77  str.buy

COMPANY NEWS

▶ Diana Containerships posts 2Q profit   [12:24AM  Associated Press]
▶ Diana Containerships reports 1Q loss   [May-22-17 08:39AM  Associated Press]
▶ Cenovus, Rite Aid Slide into Fridays 52-Week Low Club   [Mar-31-17 04:04PM  24/7 Wall St.]
▶ Diana Containerships reports 4Q loss   [Feb-13-17 09:01AM  Associated Press]
▶ [$$] Charting the Market   [Nov-19-16 01:40AM  at Barrons.com]
▶ Shipping stocks on track for big bounces   [Nov-18-16 09:21AM  at MarketWatch]
▶ Shipping stocks soar as bears abandon ship   [07:30AM  at MarketWatch]
▶ DryShips: What the Heck Is Going On?!?!   [10:19AM  at Barrons.com]
Financial statements of DCIX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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