Star Bulk Carriers: Sailing ahead on a comparative advantage

Comparative advantage can be readily witnessed in specific country output: Germany, beer; France, wine; Switzerland, watches; United States, media; Colombia, coffee. And then there's Greece, which has long demonstrated a persistent comparative advantage in bulk-ocean shipping. It's an advantage we expect Athens-based Star Bulk Carriers Corp. (Nasdaq: SBLK), a major transporter of iron ore, coal, grains, bauxite, fertilizers and steel products, to perpetuate well into the relevant future.  

Star Bulk is a newbie to both the world's shipping lanes and the U.S. equity markets. The company, incorporated in the Marshall Islands on Dec. 13, 2006, and is the product of its Nov. 30, 2007, merger with Star Maritime Acquisition Corp., a special-purpose acquisition company, leaving Star Bulk as the stand-alone entity. It subsequently received Nasdaq-listing approval, with trading commencing Dec. 3, 2007.

In its new form, Star Bulk operates a fleet of eight dry bulk carriers, and has a definitive agreement to acquire two dry bulk carriers. The fleet consists of three capesize, one panama and six supramax dry bulk vessels, with an average age of 11 years and a combined cargo carrying capacity of 927,800 deadweight tons. Vessels are classified into four categories based on their carrying capacity in deadweight tons: handysize (10,000-39,999 DWT), handymax/supramax (40,000-59,999 DWT), panamax (60,000-99,999 DWT) and capesize (higher than 100,000 DWT).

Last week, Star Bulk reported its first public financial statements. Net income posted at $1.61 million, or $0.05 per share for the fourth quarter, compared with $620,000, or $0.02 per share, in the same quarter last year, on reported total revenue of $3.69 million. But since Star Bulk is such a different animal compared to last year, the numbers are essentially meaningless.

---You can read the FULL article when you register (registration is free!) or sign-in to SmallCapInvestor.com---