FBR Capital Maintains Underweight Position On Dry Bulk Sector, On Oversupply Situation (DRYS, TK, DSX, more...)

FBR Capital reiterated their Underweight position on the dry bulk industry after meeting with the largest and most advanced shipbuilder in China, China Shipbuilding Industry Corporation, said they expect all vessels to be delivered. FBR said the resulting oversupply situation should continue to pressure day rates and, thus, asset values.

FBR commented, " We believe dry bulk equities will underperform the broader market in the near and medium term, but we maintain that companies that have capital can buy cheap assets that should create long-term shareholder value. We learned that CSIC expects no net order book cancellations and only 1%-2% delays, that there is an implicit guarantee for orders to be financed by banks, based on the government's strategic plan, and that China aims to grow its shipyard market share from 29.5% to 43%-48% over the next five to seven years. Republished to change "billion" to "million" for IPO number in third bullet."

Dry Bulk Stocks:

• DryShips, Inc. (Nasdaq: DRYS)
  
• Teekay (NYSE: TK)
  
• Diana Shipping (NYSE: DSX)
  
• Overseas Shipholding (NYSE: OSG)
  
• Genco Shipping (NYSE: GNK)
  
• Seaspan (NYSE: SSW)
  
• Navios Maritime (NYSE: NM)
  
• Danaos (NYSE: DAC)

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