Private equity's Oaktree Capital Management has cashed in another chunk of its Eagle Bulk Shipping shareholding to the tune of a $5.23m payout, although the divestment remains minor in comparison to its total stake.
Oaktree sold more than 138,000 shares in three batches from 16 March to 18 March at between $37.53 and $38.18 per share.
This follows on from the investor's previous report on 18 March that it sold 136,000 shares for proceeds of more than $4m.
As TradeWinds has reported, attention has turned to whether Oaktree and GoldenTree Asset Management — the Connecticut shipowner's two largest holders — will begin a sell-down similar to that seen at dry bulk peer Genco Shipping & Trading in recent months.
Oaktree and GoldenTree together own about 58% of the Gary Vogel-led company — about the same as three top private equity holders in Genco before they began divesting in late 2020.
Still, the 274,000 shares sold by Oaktree to date represent only about 7% of its 3.9m Eagle Bulk units, which make up roughly a 32% stake.
A source familiar with Eagle Bulk's shareholding said further sales by the top holders could be seen as a double-edged sword. He said it is good in that they diversify shareholding and increase trading liquidity, but concerning if it appears that a pair of steadfast supporters are exiting the stock.
"Bad news, good news, who knows?" equity analyst Poe Fratt of Noble Capital Markets advised clients in a research note on Monday.
"We would not be surprised if the selling continues, and the other major shareholder scales back too."
Such expectations have been fuelled by Eagle Bulk's soaring share price, which has more than doubled since December. Eagle Bulk shares have been trading north of $39 lately.
Fratt has a buy rating and a $45 price target on the stock.
"Expanded operating leverage, an improved fleet profile and scrubbers should add value if and when fuel spreads recover," Fratt told clients.
"While the [year to date] gain of 99% erased last year’s loss of 41% and discounts some of the dry bulk market recovery, we believe that the outlook is bright and the risk/reward profile remains attractive."
Stamford-based Eagle Bulk trades on the Nasdaq exchange and operates 52 bulkers, all within the ultramax and supramax vessel classes.
