2. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 20
Global Ship Lease, Inc. (NYSE:GSL) is a London-based company that owns and charters containerships to container shipping companies. On August 30, Global Ship Lease, Inc. (NYSE:GSL) announced a new multi-year charter with Hapag-Lloyd for six ECO 6,900 TEU ships. The charters are expected to generate an average adjusted EBITDA of roughly $13.1 million per ship annually and total adjusted EBITDA of around $393 million for the six ships over the charter period. Jefferies analyst Omar Nokta on July 20 initiated coverage of Global Ship Lease, Inc. (NYSE:GSL) with a Buy rating and a $22 price target, saying he finds the shares “very compelling” at current levels.
On August 4, the company reported a Q2 non-GAAP EPS of $1.85 and a revenue of $154.5 million, gaining 86.4% year-over-year. The adjusted EBITDA was $95.3 million for the second quarter 2022, up from $49.5 million in the second quarter of 2021. Global Ship Lease, Inc. (NYSE:GSL) also declared a $0.375 per share quarterly dividend, in line with previous. The dividend was paid to shareholders on September 2. The company delivered a dividend yield of 8.05% on September 2.
According to Insider Monkey’s Q2 data, 20 hedge funds were bullish on Global Ship Lease, Inc. (NYSE:GSL), compared to 22 funds in the last quarter. Israel Englander’s Millennium Management is the biggest position holder in the company, with 1.3 million shares worth $21.8 million.
Here is what Massif Capital has to say about Global Ship Lease, Inc. (NYSE:GSL) in its Q4 2021 investor letter:
“We initiated a 6% position in GSL, bringing total maritime transit exposure up to ~9% of the portfolio when combined with our 3% SBLK position. GSL is a containership owner, leasing ships to container companies (such as a Maersk) at fixed rates. As owners, they own and manage the vessels (responsible for crews, maintenance, insurance) but do not have fuel costs. GSL focuses on mid-size to smaller containerships, which serve the faster-growing inter-regional trade routes that represent ~70% of global containerized trade volume.
As they own its containers, their business is both pro-cyclical (chartered tonnages used as growth platform by liner shipping companies) and counter-cyclical (with the sale and lease-back structures used by liner companies as a balance sheet management tool). GSL has a track record that includes both organic acquisitions and a strategic combination in Q4 2018 that doubled the size of the fleet.
We like GSL because they do not have as much operational leverage as a company like ZIM (which leases on both sides of the trade), and they sign 2–5-year contracts. Liners have been eager to secure that capacity for extended durations spanning multiple years, significantly longer than has been the case historically and well-aligned with GSL’s strategic preference to lock in value over time and provide forward visibility on cash flows…” (Click here to see the full text)
