Golden Ocean Group Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Golden Ocean Group Limited is an international dry bulk shipping company. A fleet of dry bulk ships, including Newcastlemax, Capesize, Panamax, and Ultramax vessels, is owned and operated by the company. Along international shipping routes, the company's vessels deliver a variety of bulk commodities, such as ores, coal, cereals, and fertilizers. Its vessels operate in the spot and time charter markets, furthermore the company owns approximately 81 dry bulk vessels.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 8.44% in the last three months as well as by 21.38% in the nine-months.
• The stock is leaning towards the lower band of its 52-week range of USD 16.46 and 52-week low price of USD 7.24, with the current price near a decent support range of USD 7.60- USD 8.30 from where the price has taken a decent bounce.
• The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 45.18, recovering from near the oversold area.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

GOGL over the last five years has been in an upward trending momentum in its revenues and gross profits, the primary contributor being the increased revenue growth in both Time Charter and Voyage Charter segments. GOGL has grown its revenues and gross margin at an impressive 5-year CAGR of 19.34% and 23.86% respectively. Furthermore, the higher CAGR for gross profit means increased efficiency in managing the cost of revenues by the company over the last five years. Finally, even though GOGL has leveraged its balance sheet compared to the industry median, still the company is taking successful efforts to control the Debt/Equity ratio, which can be evident from the downward sloping Debt/Equity ratio in the previous five quarters.

1.4 Top 10 shareholders:

• The top 10 shareholders together form ~52.76% of the total shareholding, signifying concentrated shareholding. Hemen Holding Limited and Folketrygdfondet are the biggest shareholders, holding the maximum stake in the company at ~39.15% and ~3.78%, respectively.

1.5 Consistent dividend payments with impressive dividend yield:

GOGL has had a history of paying dividends for 22 years, as the first dividend was paid on 11^th February 2000. GOGL has an impressive dividend yield of 9.10% and at an annual dividend of USD 0.80 per share. The dividend is paid every three months and the last ex-dividend date was February 27, 2023, with the dividend payment date being March 09, 2023. GOGL’s impressive dividend yield has made the stock a good opportunity for regular income preferring investors.

1.6 Freight Index Analysis:

The Baltic Dry Index is a gauge of shipping rates for dry bulk commodities, indicating global demand for commodities and shipping capacity. It is historically correlated with the share price of GOGL, a shipping company. When the BDI index price is high, GOGL's earnings and share price may be positively affected due to strong demand and potentially higher shipping rates, and when the BDI index price is low, GOGL's earnings and share price may be negatively impacted. Recently, the BDI index increased after a low point in mid-February, which suggests there may be a positive financial announcement for GOGL's Q1FY23.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY22:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 8.44% in the last three months as well as by 21.38% in the nine-months.
• The stock is leaning towards the lower band of its 52-week range of USD 16.46 and 52-week low price of USD 7.24, with the current price near a decent support range of USD 7.60- USD 8.30 from where the price has taken a decent bounce.
• The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 45.18, recovering from near the oversold area.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 09, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.

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