Diana Containerships (DCIX) Stock: Should You Buy The Dip?

Diana Containerships Inc (NASDAQ: DCIX) hasn’t been having the best of times in the past several trading sessions, and the stock is continuing on a downward trend in the market this morning. Today, we’ll talk about:

  • Why now may be the time to buy DCIX;
  • what we’re seeing from the stock; and
  • what we’ll be watching for ahead.

Why Now May Be The Time To Buy DCIX

As mentioned above, Diana Containerships is having a rough start to the trading session this morning. However, I don’t believe that the declines will last long. Here’s why:

Recently, shipping stocks like DCIX have been on the uptrend. That is until the past several trading sessions. The gains were the result of an announcement that the Trump Administration was putting an end to a more than a century long treaty known as the Postal Treaty. With this treaty ended, the price of shipping to the United States from China and some other regions will increase, ultimately giving shippers the opportunity to earn more.

While that is relatively old news, it will likely play a role in the company’s ability to generate revenue growth. Furthermore, there’s an opportunity to produce larger profits. At the end of the day, one of the biggest expenses in the shipping sector is fuel, and that expense is falling.

Recently, we’ve seen a relatively consistent reduction in the price of oil. Today, the price is up slightly after China announced record imports, but that isn’t likely to last long. At the end of the day, the oil industry is looking yet another supply glut in the eyes, and should it get out of control, the price of oil will likely fall hard, cutting down on expenses for DCIX and other shippers yet again.

So, while the stock is falling in the market today, there’s quite a bit to be excited about across the shipping sector. So, the declines may be an opportunity to get in on future gains at a discount.

What We’re Seeing From The StockĀ 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Diana Containerships, there hasn’t been much company specific news released. However, if you dig into the sector, the news has been pretty positive as of late. Sure, the stock is falling, but that is likely a door to get in on profits at a discount. Nonetheless, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:40), DCIX is trading at $1.50 per share after a loss of $0.12 per share or 7.41% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on DCIX. In particular, we’re interested in following the company to see how it takes advantage of the changing tides in the shipping sector. We’re also interested in watching oil closely as it plays a big role in expenses for the company. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!

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