Paul Rolfes
Feb 12, 2008 6:20am EST
When
Paragon Shipping Inc. (Nasdaq: PRGN) became a public company last August, investors who didn’t set sail with the initial offering priced at $16 might have figured that they had missed the boat. Or not.
The Greek shipping company, formed in 2006, immediately faced some rough seas, with its stock price falling nearly 10% on Paragon’s first day of trading. Put an asterisk next to that drop, however, because on that day, Aug. 10, the U.S. stock markets were roiling through one of their all-too-typical gyrations southward, with the Dow Jones Industrial Average sinking as much as 320 points during the trading session.
Since then, shares of Paragon have been buffeted by the economic headwinds generated in the United States, which have blown across the globe. The young stock crested at $27.34 on Oct. 29, and recently sank as low as $12.51, on Jan. 22.
Analysts who are tracking Paragon don’t necessary believe this is a shipwreck waiting to happen. According to Thomson Financial, two analysts have Paragon at a “buy” rating, while another rated it a “hold.” The median price target calculated by Thomson is a healthy $26.50 — above Monday’s closing price of $18.
Industry estimates place the demand for seaborne dry-bulk shipping growing at better than 6% annually since 2001. While the U.S. economy struggles, the rest of the world is doing all right, with global output having grown about 5% last year. Demand for dry-bulk shipping — Paragon’s specialty — has been rising substantially for more than a decade, and the company has routes serving high-growth nations China and India, as well as other parts of Asia.
Paragon Shipping: Beyond the sea
