We initiate coverage of Seanergy Maritime with a BUY recommendation and target price of USD 1.25.

The company has made some very attractive acquisitions at the bottom of the cycle, one example being the two 2010-built Korean Capes which have appreciated ~60% since the deal was announced six months ago.

We see recent equity issuances as accretive given the appreciation of asset prices. However, we believe a discount on the company vs peers is just given several factors; including the At-The-Market (ATM) program, recent fee structure, the class A Warrants and share illiquidity.

Valuation: Our target price of USD 1.25/sh is based on a NAV of USD 0.94/sh, but added value from the optionality of a further 10% increase in asset values which would equate to a NAV of 1.67/sh, and applying a 25% discount. The implied asset value elasticity of NAV is 79% in our calculations, which is attractive given our view of rising asset prices, but equally sensitive on the downside… We recommend the less risk averse investor to BUY the share.

Company specifics:

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Market fundamentals:

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 Disclaimer: The publisher currently has no investments in the company
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One thought on “SHIP-US: Initiation (BUY, TP 1.25)

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