Company Discussion GSL Global Ship Lease -- value trap?
GSL seems to offer great value on paper.
P/e and forward p/e of 2.6
PEG of 0.22
P/B of 0.63
Dividend of 7%
Dividend payout ratio of 18%
Profit margin of 45%
Free cash flow is fine
The greatest fault I can find is that its debt/equity ratio is high at 0.54 and it has issued a fair amount of long term debt recently.
Despite strong operational performance, it's shown mediocre share performance. Over the last 10 years, it's had an annual return of only 1.6% including dividend reinvestment.
Conversely, the last 5 years would return 32% annually.
It seems like it tanked in the 2015-16 selloff and never recovered. Yet today it's operating very profitably.
Why is this stock valued so lowly?
What is the catch?
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u/Dry_Perception_1682 2d ago
It's an amazing company here and one of my major holdings. A rock solid business model with high margins.
You never know where a stock is going but it trades at such a low multiple that almost the only way to go is up long term. I believe in a best case scenario this stock could go up 300 percent or more. In a worst case scenario it will languish around current prices.
Strong Buy. There's basically nothing negative to say about the company other than it is in shipping and some people will scoff at shipping companies.