Diana Shipping is a household brand in the dry bulk market, but it is now the latest public shipowner to lose research coverage because of its lack of market capitalisation and trading liquidity.
The Greek bulker owner was dropped from coverage by US investment bank Jefferies after the close of trading on Friday in a statement that referenced only the boilerplate “reallocation of resources” that often accompanies such notices.
Jefferies lead shipping analyst Omar Nokta was not immediately available for comment. However, a finance source confirmed that Diana had fallen on the scale criteria.
Nokta was one of only two analysts writing research on the time charter-oriented bulker owner, according to Yahoo Finance.
The action came one day after Diana reported disappointing second-quarter results, logging a loss of $2.6m in net income and a $4.2m loss attributable to common shareholders. It was the second consecutive quarter in which the Semiramis Paliou-led company had reported lower time charter rates.
However, the problems facing Diana from a bank research standpoint were more systemic.
Its market capitalisation of $296m compares with the $2.44bn share value of sector bellwether Star Bulk Carriers of Greece.
It is lower even than that of Rhode Island bulker operator Pangaea Logistics Solutions, which historically has received scant analyst coverage. Pangaea had a market cap of $311m at the close on Friday.
Diana’s daily share turnover in dollar terms has been about $1.7m over the past 30 days. That compares with roughly $33.5m for Star Bulk and close to $60m for a major tanker owner such as Scorpio Tankers.
Lack of scale and turnover have been serious negatives for public shipowners — particularly in dry bulk — in trying to maintain bank research coverage in recent years.
When Deutsche Bank dropped most dry bulk coverage in 2020, its lead shipping analyst, Amit Mehrotra, predicted little future for companies below a $500m market cap. In a recent interview upon leaving Deutsche Bank for UBS, Mehrotra said that number probably has shifted to $1bn.
Deutsche Bank’s long-time investment banker Craig Fuehrer told a Marine Money conference in June: “The last thing the world needs is another $300m to $500m shipping company.”
Jefferies has by far the largest breadth of shipping coverage among the US banks with 27 names. Nokta is the only major US-based analyst to focus solely on shipping.
Diana has an owned fleet of 39 bulkers ranging from ultramax to newcastlemax.
