Oceanfreight, Inc.

Oceanfreight is benefiting from global commodity demand as its vessels reach nearly 100% utilization rates. The company has surprised on earnings three out of the last four quarters on average of 117.48%. Oceanfreight has a forward P/E of 9.66.

Full Analysis

Oceanfreight, Inc. (OCNF - Snapshot Report) is a global marine transportation company based in Greece that ships drybulk and crude cargoes. The company acquired its first vessel in June 2007 and now owns a fleet of 11 vessels, including 1 Capesize bulk carrier, 8 Panamax bulk carriers, 1 Aframax tanker and 1 Suezmax tanker with a total carrying capacity of approximately 978,889 million deadweight tons.

On May 20, OCNF reported first quarter estimates that beat Wall Street estimates by 33.33%. The company reported net income of $6.4 million, or 44 cents per share, compared with net income of $6.4 million, or 44 cents per share, in the fourth quarter of 2007.

The period was affected by a non-cash charge of $5.3 million and a one-time cash charge of $1.1 million. Excluding those items, net income was $12.8 million, or 88 cents per share. Analysts expected 66 cents per share for the quarter.

Gross revenue was $38.4 million in the first quarter, compared to $23.2 million in the fourth-quarter 2007.

It was the first quarter since the company started acquiring its vessels last June that OCNF had all eleven of its ships operational. Oceanfreight has also been locking in period contracts.

"We achieved fleet utilization close to 100% which is a testament to the operational capability and efficiency of our ship managers. With the time charter of the Olinda all of our vessels will be employed on period contracts with an average remaining duration of 2.2 years," said Anthony Kandylidis, the Company's President and Chief Executive Officer.

"Our time charter coverage presently stands at about 95% and 87% of the total vessel operating days for the calendar year 2008 and 2009 respectively," he said.

Oceanfreight Announces 77 Cent Per Share Quarterly Dividend

The company's states that its strategy is to deliver consistent shareholder returns. To that effect, OCNF recently announced, for the second quarter in a row, a quarterly dividend of 77 cents per share. The current dividend yield is 12.60%.

Analysts Raise Estimates

Brokerage analysts responded to the first quarter report by raising estimates for the second quarter and the year. Consensus estimates for the second quarter rose 24% in the last week to 72 cents from 58 cents per share. For the full year, estimates are up 15 cents to $2.63 from $2.48 per share.

Oceanfreight, a Zacks #1 Rank (Strong Buy), has a 2008 P/E of 9.66. Its price-to-book is 1.46, below the industry average of 1.96.