Castor Maritime, a major owner of Eagle Bulk Shipping (EGLE), recently added 169,635 shares. The buy increased the company’s stake by 12%, and came to a total cost of $10.65 million.
This is the first insider activity at the company since last August, when a director bought and sold some shares, and the company CEO sold some shares. Going further back to June 2023, another major holder bought 181,422 shares for about $8.6 million.
Overall, Eagle insiders own 29% of shares.
The bulk cargo shipping company has risen 41% over the past year, outperforming the overall stock market.
Earnings and revenues are still lower, reflecting declining shipping prices as global supply chains have normalized. In the past year, revenues have slid 30% and earnings are off by 70%.
Even with that drop, Eagle trades at about 11 times forward earnings, making it inexpensive relative to the overall market.
Action to take: The company just approved a merger with another major carrier, Star Bulk (SBLK). Eagle owners will acquire 2.62 shares of Star Bulk for each common Eagle share.
Investors who still see upside in the space may want to buy Eagle shares as a way of getting a slight discount on Star Bulk. That method may earn a slightly higher return, but patient traders may simply want to wait for the merger to finish and buy Star Bilk.
For traders, Star Bulk’s August $25 calls, last going for about $1.25, could see mid-double-digit returns on a post-merger rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.