Throughout the COVID-19 pandemic, many companies on our shipping stocks list have seen tremendous share price movement. Lockdowns, labor shortages and the war in Ukraine are just some of the influencing factors.
The Baltic Dry Index, which measures pricing for global shipping rates is largely cyclical in nature. Looking back at previous years, we can see the BDI often reaches a yearly high around September and then falls off for the rest of the year. This year the drop-off looks to have occurred much sooner, around the end of May.
The BDI reached a 52-week low of 965 yesterday. This shows a massive drop off since its May 23rd high of 3,369.
Despite the drop in the index, many of the companies on our shipping stocks list are incredibly sound financially. So why do shipping stocks continue to drop? Well, as mentioned earlier the COVID-19 pandemic is still a major contributing factor impacting industry laborers. This causes backups where ships are stuck in ports or trips are canceled all together. These uncertainties as well as supply and demand price changes have significantly impacted the shipping industry.
Another reason these stocks are falling is an increase in short interest. Investors anticipate that shipping stocks may drop further, so they short them. This impacts the overall market sentiment as others follow suit.
Standouts to Watch
Golden Ocean Group Limited (Nasdaq: GOGL)
A few weeks ago I wrote about Golden Ocean Group Limited. Out of all the companies on our shipping stocks list, Golden Ocean has been getting a lot of attention.
The Bermuda-based shipping company has a very good track record for dividend payouts. Golden Ocean declared a cash dividend of $0.60 per share, payable on or about September 14, 2022, to shareholders of record on September 7, 2022. The company also recorded a net operating income of $155.77 million versus $97.37 million a year ago; and a margin of 49.2%, compared to 35.3% a year ago.
Golden Ocean Group Ltd currently has a median 12 month target of $14.53, with a high estimate of $19.00 and a low estimate of $9.00. The median estimate represents a 45.61% increase from the last price of $9.98.
Star Bulk Carriers Corp. (Nasdaq: SBLK)
Star Bulk Carriers Corp. is another stock on our shipping stocks list not many investors are talking about. The company saw significant share price movement over the past few months, rising all the way to $33.60 in May. However, since then the stock has fallen below the $20 mark. This could be a good entry price.
Star Bulk declared a dividend of $1.65 per share payable on or about September 8, 2022. And the company continues to improve its balance sheet. See all the details from last month’s earnings call here.
SBLK currently has a median 12 month target of $33.50, with a high estimate of $40.00 and a low estimate of $22.00. The median estimate represents a 66.50% increase from the last price of $20.12.
Nasdaq Shipping Stocks List
Capital Product Partners L.P. (Nasdaq: CPLP)
Castor Maritime Inc. (Nasdaq: CTRM)
Eagle Bulk Shipping Inc. (Nasdaq: EGLE)
EuroDry Ltd. (Nasdaq: EDRY)
Euroseas Ltd. (Nasdaq: ESEA)
Globus Maritime Limited (Nasdaq: GLBS)
Golar Lng Ltd (Nasdaq: GLNG)
Golden Ocean Group Limited (Nasdaq: GOGL)
Grindrod Shipping Holdings Ltd. (Nasdaq: GRIN)
Malibu Boats Inc. (Nasdaq: MBUU)
MasterCraft Boat Holdings Inc. (Nasdaq: MCFT)
Navios Maritime Containers L.P. (Nasdaq: NMCI)
Odyssey Marine Exploration Inc. (Nasdaq: OMEX)
Pangaea Logistics Solutions Ltd. (Nasdaq: PANL)
Performance Shipping Inc. (Nasdaq: PSHG)
Pyxis Tankers Inc. (Nasdaq: PXS)
Seanergy Maritime Holdings Corp. (Nasdaq: SHIP)
Star Bulk Carriers Corp. (Nasdaq: SBLK)
StealthGas Inc. (Nasdaq: GASS)
TOP Ships Inc. (Nasdaq: TOPS)
TORM plc (Nasdaq: TRMD)
Vision Marine Technologies Inc. (Nasdaq: VMAR)
Final Thoughts
Understanding the cyclical nature of the companies on our shipping stocks list is critical. Many of these companies have sound financials and strong earnings reports. They are simply going through a dip that investors may consider buyable. GOGL and SBLK are great examples of value buys because they have strong potential as well as multiple analyst targets much higher than their current trade price. This coupled with ongoing inflation should only help to increase revenue in the long run.
To learn more about shipping stocks, trading, crypto and more… sign up for one of our best investment newsletters. These free mailings will help you make smarter, more profitable investments. Sign up today.
Ben Broadwater is the Director of Investment U. He has more than 15 years of content creation experience. He has worked and written for numerous companies in the financial publishing space, including Charles Street Research, The Oxford Club and now Investment U. When Ben isn’t busy running Investment U, you can usually find him with a pair of drumsticks or a guitar in his hand.
