Sunday, January 20, 2008

Double Hull (DHT) Shares Rise on Upgrade

Shares of Double Hull Tankers Rise After Analyst Suggests Stock Is Undervalued
January 18th, 2007

NEW YORK (AP) -- Shares of Double Hull Tankers Inc., which owns and operates a fleet of crude oil tankers, soared Friday after a Citi analyst raised the stock to "Buy," citing its improved value following steep sell off.

Analyst John Kartsonas said that despite his negative expectations for the tanker market in the next several years, Double Hull's current share value provides a buying opportunity for investors.

He noted that the company's recent implementation of a fixed quarterly dividend provides steady benefits for investors as well, despite some investors frowning over the new 25 cent-per-share dividend as a cut from previous quarters.

Quarterly dividends ranged between 37 cents a share and 44 cents a share in 2007.

"Management's decision to reduce the dividend might have upset some investors, but the reality is that longer term it should prove to be a wise decision -- a company cannot pay dividends that are well above earnings and rely purely on the equity markets for growth," Kartsonas said in a note to clients. "Given the importance of dividends in the shipping world, we believe investors will continue to view Double Hull as a dividend provider but this time with the additional benefit of growth."

He raised his estimates for 2008, citing stronger-than-expected first-quarter vessel rates and newly-acquired carriers.

However, lowered his 12-month price target to $12 from $14, saying he expects higher costs in 2008. He also lowered his 2009 estimates on lower expected vessel rates.

Shares of Double Hull rose 90 cents, or 9.5 percent, to $10.40 Friday. The stock has ranged between $9.32 and $18.79 in the past 12 months.

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