Shares of Athens, Greece-based Diana Shipping (NYSE: DSX) were swimming full speed ahead Tuesday morning, up by 13.4% as of 11:49 a.m. EST after brokerage firm BTIG announced it was initiating coverage of the dry bulk shipping company with a buy rating and a $5 price target.
Diana Shipping stock closed trading Monday at $2.60 a share, meaning BTIG is predicting close to a 100% gain for this stock over the next 12 months — reason enough for investors to get excited, one would think. But consider, too, BTIG’s logic in making this buy recommendation.
Diana just completed a stock tender in which it successfully bought back about 7% of its shares outstanding for a low $2.50 a share, reports StreetInsider.com. This will have the effect of concentrating future profits among fewer shares of stock.