Image Source: Unsplash

As part of our ongoing series at The Acquirer’s Multiple, each week we spotlight a stock from our Stock Screeners that might be a deeply undervalued gem hiding in plain sight. This week’s spotlight is Global Ship Lease, Inc. (GSL) — a containership charter owner with long-term, fixed-rate contracts providing stable and visible cash flows in the volatile global shipping sector.

Business Overview

Headquartered in London, GSL owns and charters a diversified fleet of mid-sized and smaller containerships on long-term time charters to leading liner companies. These charters typically provide multi-year revenue visibility and protection from short-term spot-rate volatility. The company benefits from fleet expansion and accretive vessel acquisitions during market downturns, positioning itself to compound value as freight rates and charter durations normalize.

What is IV/P (Intrinsic Value to Price)?

IV/P tells you whether a stock offers more intrinsic value than the price you are paying for it. The calculation blends earnings power, reinvestment efficiency, and capital return policy to estimate intrinsic value — a conservative measure of what the business is worth.

The interpretation is straightforward:

• IV/P above 1 suggests undervaluation.
• IV/P below 1 suggests overvaluation.
• The further above 1, the more value you may be getting per dollar invested.

GSL’s IV/P is 1.70, meaning its intrinsic value is estimated to be roughly 70% higher than its current market price — a strong signal of potential undervaluation.

Supporting Metrics

Market Cap: ~$1.017 B
Enterprise Value (EV): ~$1.288 B
Free Cash Flow (TTM): ~$142 M
Free Cash Flow Yield: ~11%
Acquirer’s Multiple: 3.3

Global Ship Lease (GSL) trades at a market cap of about $1.0 billion and an enterprise value of $1.3 billion, generating roughly $142 million in free cash flow—equating to an ~11% FCF yield and an Acquirer’s Multiple of 3.3, highlighting strong cash generation relative to valuation.

Revenue & Profitability

• Revenue (TTM): $730 M
• Operating Income (TTM): $381 M
• Operating Margin: ~52%
• Net Income (TTM): $383 M
• Net Margin: ~52%
• Diluted EPS (TTM): $10.70

Profitability has remained robust, supported by long-term charters that lock in high-margin contracts. Even as freight markets cooled from 2022 peaks, GSL sustained strong operating margins and earnings stability — a rarity in the cyclical shipping space.

Balance Sheet Strength

• Cash & Equivalents: ~$167M
• Total Debt: ~$684M
• Net Debt: ~$533M
• Shareholder Equity: ~$1.46B

GSL maintains a solid balance sheet with strong equity backing and ample liquidity relative to its vessel commitments. While leverage remains moderate due to fleet financing, the company’s substantial asset base and steady contracted cash flows provide flexibility for future fleet expansion and shareholder returns.

Capital Returns

• Dividend Yield (TTM): ~6–7%
• Total Dividends Paid (TTM): ~$76 M
• Capital Expenditure (TTM): ~$304 M

GSL continues to return capital to shareholders through a growing dividend while reinvesting in its fleet. The company’s disciplined capital allocation — balancing fleet renewal with dividends — supports both sustainability and long-term compounding.

Why Might GSL Be Undervalued?

Shipping stocks often trade at deep discounts due to cyclicality and investor hesitation following previous booms and busts. Yet GSL’s long-term charter coverage, strong free cash flow, and solid balance sheet differentiate it from typical shipping plays. Its Acquirer’s Multiple of 3.3 and IV/P of 1.70 suggest the market is mispricing a company that generates stable, contracted cash flows and yields double-digit free-cash-flow returns.

Conclusion

With an IV/P of 1.70, an Acquirer’s Multiple of 3.3, and a free cash flow yield of roughly 11%, Global Ship Lease (GSL) represents a compelling deep-value opportunity in the transportation sector. For patient investors, the combination of strong earnings visibility, high cash generation, and shareholder-friendly capital returns offers a rare setup: a cyclical business behaving like a compounding cash machine.

More By This Author:

Meta Platforms, Inc.: Our Calculation Of Intrinsic Value
Why Small Caps Are Poised For A Multi-Year Comeback
Tesla, Inc. Q3 2025: Revenue Up 12%, Free Cash Flow Hits New Record