I have held this stock for several years and am up. It appears to be range bound and I am not sure if it has any more room to run. I am thinking that I should take the profit and be happy. I think there debt may be high and they are dependent on the overal economy. What do you think...any up side in sight? Thanks for your excellent service!
BDI has been consolidating for a year now at its highs between $8 and $10, and this type of price action can lead to an upside breakout if the fundamentals continue to improve and the valuation warrants higher prices. We like its overall momentum over the past several years, it trades at an OK valuation of 16X forward earnings, it pays a small yield of 1.5% and has a decent buyback policy in place. Forward earnings growth estimates are around 15% to 17% over the next few years, and analyst estimates have mostly been rising. Growth is volatile, but its margins have been expanding in recent years and if it can continue to beat earnings estimates and grow its cash flows, we think it can eventually break to new highs, but much depends on earnings results and management's execution.
Net debt/EBITDA is OK at 2.1X, and it is cyclical to economic swings, but we think the market has priced in some of these risks at a 16X forward earnings multiple.