Star Bulk Carriers Corp. (SBLK:NASDAQ)
Price at Preparation: $24.17 (Mar 18th, 2024)
What they do
Star Bulk Carriers Corp (SBLK:NASDAQ) is a Greece-based global shipping company. It owns and operates a fleet of dry bulk carrier vessels. The vessels transport major bulks, which include iron ore, coal, grain and minor bulks (which include bauxite, fertilizers, and steel products). Its fleet consists of 128 vessels with carrying capacities between 52,247 and 209,537 deadweight tonnage (dwt). The Company’s fleet includes Newcastlemax, Capesize, Panamax, Post Panamax, Kamsarmax, Ultramax, and Supramax vessels with an aggregate capacity of more than 14 million dwt and an average age of approximately 10 years. Star Bulk Carriers Corp’s vessels transport minerals from the Americas and Australia to East Asia: China, Japan, South Korea, Taiwan, Indonesia and Malaysia. Minerals, grain products, and steel between the Americas, Europe, Africa, Australia and Indonesia – from these areas to China, Japan, South Korea, Taiwan, Philippines, Malaysia, and others.
At Theta Bandits, we are always looking to bring fresh ideas with assets on the move for an assortment of reasons that could provide the potential for a nice return on your portfolio. Today’s pick is Star Bulk Carriers Corp. (SBLK) – let’s get into the potential we see with this trade.
Opinion
Star Bulk Carriers Corp. (SBLK) is a global shipping company and while trading nearby to it’s 52-week high of $25.16 USD – this stock has been chosen to be highlighted this week for 3 reasons: technical, price target and dividends.
Technical: As shown in the chart visual below, two things are happening. First, over the past year the chart is showing a “cup & handle” pattern, and we look like we are through the cup and in the handle part, which could be shallow or a bit deeper. Given the way the chart has developed we might touch the trend line before reversing upwards to complete how the cup and handle pattern usually works. Second, highlighted in white is the trend line from November 2023 which has been tested but not broken significantly. There is the old saying “trend is your friend” – so while this trend line is holding, price action continuing upward is highly probable.
Price Target (PT): Current 12-month PT has an average upside to $27.72 USD (+14.39%) with a maximum estimate to $34.00 USD (+40.29%). In the worst-case scenario, the current estimate is $23.00 (-5.10%), which provides a decent risk/reward profile for this stock over the next year.
Dividends: The company currently boasts a dividend yield of 6.65% annually or $0.45 USD per share quarterly, which has recently passed and explains the small pullback in the stock price.
Plan
As always, to try maximizing the gain out of these picks, on the graphs above we have identified $23.12 USD as the intersection of the trend line and support line in the near term to provide a possible entry for the trade. Keep an eye in case the trend breaks to the downside and the price sinks lower – a mitigation strategy could be buying in stages and dollar cost averaging vs buying a full position all at once. If using this stock for the dividend be aware for the volatility around ex-dividend payouts. Otherwise follow the trend upwards and plan to secure profits or exit near the 12-month average PT of $27.72 USD. If feeling brave, you can aim for the higher $34.00 USD PT.
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies for various tickers daily. Traders in this community could potentially attack purchasing this position using other methods discussed in previous Top Pick Tuesdays.
RISKS
In the plan above we have listed mitigations to protect the position while the trade is active. However, make sure to plan your trade to give it the time it needs to be successful, while setting and updating limits to mitigate risk and set exit points for your position as necessary.
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
