ATHENS - Star Bulk Carriers Corp. (NASDAQ:SBLK), a global transporter of dry bulk cargoes, has divested its oldest ship, the m/v Star Triumph, and pursued a share repurchase program, as per a recent statement. The 2004-built Capesize vessel was sold for $20 million, with net proceeds of approximately $13 million after debt repayment. This transaction is expected to result in a gain of about $7.7 million for the third quarter of 2024.
Last week, the company also repurchased 791,015 of its common shares in the open market at an average price of $20.58 per share, totaling around $16.3 million. These repurchased shares are set to be withdrawn and cancelled. The management of Star Bulk believes that the sale of the m/v Star Triumph and the repurchase of shares at these prices will enhance shareholder value, suggesting a per-share value higher than the repurchase price.
Star Bulk operates a diverse fleet that transports a range of bulk commodities, including both major bulks like iron ore and grains, as well as minor bulks such as bauxite and fertilizers. Following the delivery of the m/v Star Triumph to its new owners, the company's fleet will consist of 153 owned vessels with a combined carrying capacity of 15.0 million dwt.
The company, incorporated in the Marshall Islands and with executive offices across major global locations, has its common stock listed on the Nasdaq Global Select Market.
The recent strategic moves by Star Bulk are part of its ongoing efforts to optimize its fleet and return capital to shareholders. The information provided is based on a press release statement from the company.
In other recent news, Star Bulk Carriers Corp. posted robust Q2 2024 earnings, reporting a net income of $106 million and an adjusted net income of $89 million. The shipping company also announced a dividend of $0.70 per share, reflecting its commitment to shareholder returns. Deutsche Bank (ETR:DBKGn) initiated coverage on Star Bulk Carriers, rating it as a Buy with a 12-month price target of $26 per share, highlighting the company's strong financial position and sector-leading dividend policy.
In terms of recent developments, Star Bulk Carriers completed the integration with Eagle Bulk and sold 10 vessels for $180 million. The company also expects to increase equity by $24 million from the sale of two vessels in Q3, despite a projected decrease in equity due to new building down payments. The company's total liquidity stands at $516 million, with a cash balance of $486 million at the end of Q2.
Despite potential impacts on dry bulk demand due to China's declining steel production, Star Bulk Carriers remains optimistic about the medium-term prospects of the dry bulk industry. The firm also anticipates significant synergies from the integration with Eagle Bulk. These recent developments underscore Star Bulk Carriers' commitment to operational efficiency, growth, and shareholder returns.
InvestingPro Insights
Star Bulk Carriers Corp. (NASDAQ:SBLK) has shown a proactive approach in enhancing shareholder value, as evidenced by their recent share repurchase initiative and the profitable sale of the m/v Star Triumph. The InvestingPro data reflects a robust financial position, with a market capitalization of $2.36 billion and a price-to-earnings (P/E) ratio that stands at an attractive 7.17, indicating that the company could be undervalued compared to peers. Furthermore, the company's P/E ratio has adjusted to 9.23 over the last twelve months as of Q2 2024.
InvestingPro Tips reveal that management's aggressive share buybacks are a strong signal of confidence in the company's future performance. Additionally, Star Bulk's dividend yield is notably high at 14.09%, which is a significant return for shareholders and reflects the company's commitment to returning value. It's worth noting that the company's liquid assets exceed its short-term obligations, ensuring financial stability and operational flexibility.
Investors may also find encouragement in the fact that Star Bulk has been profitable over the last twelve months, with a gross profit margin of 47.58%, and analysts predict profitability will continue this year. These insights, along with the fact that Star Bulk's price has seen a significant drop over the last three months, could present a buying opportunity for investors looking for value stocks with solid dividend yields.
For those interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/SBLK, which provide further insights into Star Bulk's financial health and market position.
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