Danaos Corporation (DAC): A Bull Case Theory 

We came across a bullish thesis on Danaos Corporation on investing subreddit by Impossible-Road-558. In this article, we will summarize the bulls’ thesis on DAC. Danaos Corporation’s share was trading at $100.17 as of January 13th. DAC’s trailing P/E was 4.00  according to Yahoo Finance.

Danaos Corporation, through its subsidiaries, owns and operates containerships and drybulk vessels in Australia, Europe, and the United States. DAC is a financially robust containership company trading at a deeply discounted valuation, offering resilience and upside potential even in an economic slowdown. The stock, which traded around $18 in 2020, has risen to approximately $92, supported by a surge in earnings per share to about $26, up from $6.50 in 2020, marking a dramatic turnaround from a $46 per-share loss in 2016.

Despite this strong profitability, Danaos trades at a low price-to-earnings ratio of roughly 3.5 and at only 0.49x its book value, reflecting continued market skepticism that appears disconnected from its improved fundamentals. The company has significantly strengthened its balance sheet, reducing total liabilities from $2.4 billion in 2016—when it breached debt covenants—to just $644 million by the end of 2024, with long-term debt now at only $382 million. Over the same period, equity expanded from $558 million to $3.4 billion, shifting the company from a highly leveraged to a net cash position.

Cash reserves have grown from $70 million in 2017 to $453 million as of December 2024, giving Danaos financial flexibility to support share buybacks and maintain a dividend yield of approximately 3.7%. The company’s strong earnings power, conservative balance sheet, and shareholder returns position it favorably to weather macroeconomic headwinds. Although its Greek domicile could be seen as a minor drawback, Danaos’s disciplined capital management and cash-rich profile make it a compelling value play.

Previously we covered a bullish thesis on Danaos Corporation (DAC) by Inflexio Research in May 2025, which highlighted its strong backlog, share buybacks, and potential revaluation. The stock has appreciated about 15.70% since then as deleveraging and shareholder returns gained traction. The thesis still stands as DAC remains undervalued, while Impossible-Road-558 shares a similar view but focuses on its financial strength and resilience.

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Disclosure: None.