Intrinsic value of Diana Containerships - DCIX

Previous Close

$1.43

  Intrinsic Value

$3.14

stock screener

  Rating & Target

str. buy

+119%

Previous close

$1.43

 
Intrinsic value

$3.14

 
Up/down potential

+119%

 
Rating

str. buy

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 0001), $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 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  24
  25
  25
  26
  27
  28
  29
  30
  31
  32
  33
  35
  36
  38
  39
  41
  43
  45
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  74
  78
Variable operating expenses, $m
  129
  131
  135
  139
  143
  147
  152
  158
  164
  170
  177
  184
  192
  200
  208
  217
  227
  237
  248
  260
  272
  284
  298
  312
  327
  342
  359
  376
  394
  413
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
  129
  131
  135
  139
  143
  147
  152
  158
  164
  170
  177
  184
  192
  200
  208
  217
  227
  237
  248
  260
  272
  284
  298
  312
  327
  342
  359
  376
  394
  413
Operating income, $m
  -104
  -107
  -109
  -112
  -116
  -120
  -124
  -128
  -133
  -138
  -143
  -149
  -155
  -162
  -169
  -176
  -184
  -192
  -201
  -210
  -220
  -231
  -241
  -253
  -265
  -277
  -291
  -305
  -320
  -335
EBITDA, $m
  -96
  -98
  -101
  -104
  -107
  -110
  -114
  -118
  -122
  -127
  -132
  -137
  -143
  -149
  -156
  -162
  -170
  -177
  -185
  -194
  -203
  -212
  -222
  -233
  -244
  -256
  -268
  -281
  -294
  -309
Interest expense (income), $m
  7
  10
  10
  10
  11
  11
  11
  12
  12
  13
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
Earnings before tax, $m
  -114
  -117
  -120
  -123
  -127
  -131
  -135
  -140
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
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
Net income, $m
  -114
  -117
  -120
  -123
  -127
  -131
  -135
  -140
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  233
  239
  245
  252
  260
  268
  277
  287
  298
  309
  321
  334
  348
  363
  378
  395
  413
  431
  451
  472
  493
  516
  541
  566
  593
  622
  652
  683
  716
  751
Adjusted assets (=assets-cash), $m
  233
  239
  245
  252
  260
  268
  277
  287
  298
  309
  321
  334
  348
  363
  378
  395
  413
  431
  451
  472
  493
  516
  541
  566
  593
  622
  652
  683
  716
  751
Revenue / Adjusted assets
  0.103
  0.105
  0.102
  0.103
  0.104
  0.104
  0.105
  0.105
  0.104
  0.104
  0.103
  0.105
  0.103
  0.105
  0.103
  0.104
  0.104
  0.104
  0.104
  0.104
  0.103
  0.105
  0.104
  0.104
  0.105
  0.105
  0.104
  0.104
  0.103
  0.104
Average production assets, $m
  234
  239
  245
  252
  260
  268
  277
  287
  298
  309
  321
  334
  348
  363
  379
  395
  413
  432
  451
  472
  494
  517
  541
  567
  594
  622
  652
  684
  717
  751
Working capital, $m
  12
  12
  13
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  21
  22
  23
  25
  26
  27
  28
  29
  31
  32
  34
  36
  37
  39
Total debt, $m
  98
  101
  103
  106
  110
  113
  117
  122
  126
  131
  136
  142
  148
  154
  161
  168
  176
  184
  192
  201
  211
  221
  231
  242
  254
  266
  279
  293
  307
  322
Total liabilities, $m
  101
  103
  106
  109
  112
  116
  120
  124
  129
  133
  139
  144
  150
  157
  164
  171
  178
  186
  195
  204
  213
  223
  234
  245
  256
  269
  281
  295
  309
  324
Total equity, $m
  133
  136
  139
  143
  147
  152
  157
  163
  169
  175
  182
  190
  198
  206
  215
  224
  234
  245
  256
  268
  280
  293
  307
  322
  337
  353
  370
  388
  407
  426
Total liabilities and equity, $m
  234
  239
  245
  252
  259
  268
  277
  287
  298
  308
  321
  334
  348
  363
  379
  395
  412
  431
  451
  472
  493
  516
  541
  567
  593
  622
  651
  683
  716
  750
Debt-to-equity ratio
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
  0.750
Adjusted equity ratio
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568
  0.568

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -114
  -117
  -120
  -123
  -127
  -131
  -135
  -140
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
Depreciation, amort., depletion, $m
  8
  8
  9
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
Funds from operations, $m
  -106
  -108
  -111
  -114
  -118
  -121
  -126
  -130
  -135
  -140
  -146
  -151
  -158
  -164
  -171
  -179
  -187
  -195
  -204
  -214
  -224
  -234
  -245
  -257
  -269
  -282
  -295
  -309
  -324
  -340
Change in working capital, $m
  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
  -106
  -109
  -111
  -115
  -118
  -122
  -126
  -131
  -135
  -141
  -146
  -152
  -158
  -165
  -172
  -180
  -188
  -196
  -205
  -215
  -225
  -235
  -246
  -258
  -270
  -283
  -297
  -311
  -326
  -342
Maintenance CAPEX, $m
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
New CAPEX, $m
  -3
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
Cash from investing activities, $m
  -11
  -13
  -14
  -16
  -17
  -17
  -18
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -40
  -42
  -45
  -47
  -49
  -52
  -54
  -57
  -60
Free cash flow, $m
  -117
  -122
  -126
  -130
  -135
  -139
  -145
  -150
  -156
  -163
  -169
  -176
  -184
  -192
  -201
  -210
  -219
  -229
  -240
  -251
  -263
  -276
  -289
  -303
  -317
  -333
  -349
  -366
  -383
  -402
Issuance/(repayment) of debt, $m
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
Issuance/(repurchase) of shares, $m
  116
  120
  123
  127
  131
  136
  141
  146
  151
  157
  164
  171
  178
  186
  194
  202
  211
  221
  231
  242
  253
  265
  278
  291
  305
  320
  335
  351
  369
  387
Cash from financing (excl. dividends), $m  
  118
  122
  126
  130
  134
  140
  145
  150
  156
  162
  169
  177
  184
  192
  201
  209
  219
  229
  239
  251
  262
  275
  288
  302
  317
  332
  348
  365
  383
  402
Total cash flow (excl. dividends), $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
  -1
  -1
  -1
  -1
Retained Cash Flow (-), $m
  -116
  -120
  -123
  -127
  -131
  -136
  -141
  -146
  -151
  -157
  -164
  -171
  -178
  -186
  -194
  -202
  -211
  -221
  -231
  -242
  -253
  -265
  -278
  -291
  -305
  -320
  -335
  -351
  -369
  -387
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
  -116
  -120
  -123
  -127
  -131
  -136
  -141
  -146
  -151
  -157
  -164
  -171
  -178
  -186
  -194
  -202
  -211
  -221
  -231
  -242
  -253
  -265
  -278
  -291
  -305
  -320
  -335
  -351
  -369
  -387
Discount rate, %
  8.50
  8.93
  9.37
  9.84
  10.33
  10.85
  11.39
  11.96
  12.56
  13.19
  13.85
  14.54
  15.26
  16.03
  16.83
  17.67
  18.55
  19.48
  20.46
  21.48
  22.55
  23.68
  24.86
  26.11
  27.41
  28.78
  30.22
  31.73
  33.32
  34.99
PV of cash for distribution, $m
  -107
  -101
  -94
  -87
  -80
  -73
  -66
  -59
  -52
  -46
  -39
  -33
  -28
  -23
  -19
  -15
  -12
  -9
  -7
  -5
  -4
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  44.1
  19.3
  8.4
  3.6
  1.6
  0.7
  0.3
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
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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 $23.806 million for the last fiscal year's total revenue generated by Diana Containerships. The default revenue input number comes from 0001 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 8.5%, 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 529.2%.

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 10.3% 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 962.3%.

Life of production assets of 28.3 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 50%. 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 - $130.772 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 10.417 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 $0.0 billion.

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COMPANY NEWS

▶ Why Top Ships Stock Is Skyrocketing Today   [Oct-22-18 11:41AM  InvestorPlace]
▶ Diana Containerships reports 3Q loss   [06:33AM  Associated Press]

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