Shipping stocks across the board just received a series of upgrades from Morgan Stanley MS. Gainers include Star Bulk Carriers SBLK, Safe Bulkers SB, Genco Shipping &Trading GNK, DryShips DRYS, Golden Ocean Group GOGL, Scorpio Tankers STNG, DHT Holdings DHT, Global Ship Lease GSL, Seaspan SSW, Navios Maritime Partners NMM and Eagle Bulk Shipping EGLE.
The two top performers among the gainers are Star Bulk Carriers and Safe Bulker. Star Bulk is trading up 10% at $11.15 per share Safe Bulker is up 13.23% to $2.14 per share on Tuesday.
Analyst Fotis Giannakoulis listed his reasons for upgrading the ratings for shipping stocks. Giannakoulis sees the rise of commodity prices, high demand from China and a muted fleet supply gradually improving the market. He also believes that the operational and financial leverage that shipping companies have will be beneficial this year.
The operating costs are often fixed for shipping companies, so any significant increase in revenue of operation will flow into the bottom line.
Another sign for the upgrades can come from Star Bulk, and several other bulk shipping companies are buying more carriers. Star Bulk announced three weeks ago that their acquisition of two modern Kamsarmax drybulk vessels just entered a definitive agreement. This move shows that the company is in a strong liquidity position and the low-cost structure has allowed it to expand its fleet further.
The surge driven by an analyst note might be the beginning of a recovery in the shipping market, but it is not uncommon for the growth to be a short-term effect. For the long-term, it not only depends on the demand and price of the commodity, but also new trade policies that might happen under President Trump.
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Genco Shipping & Trading Limited Warrants Expiring 12/31/2021 (GNK): Free Stock Analysis Report
Eagle Bulk Shipping Inc. (EGLE): Free Stock Analysis Report
Star Bulk Carriers Corp. (SBLK): Free Stock Analysis Report
Scorpio Tankers Inc. (STNG): Free Stock Analysis Report
Navios Maritime Partners LP (NMM): Free Stock Analysis Report
Golden Ocean Group Limited (GOGL): Free Stock Analysis Report
DHT Holdings, Inc. (DHT): Free Stock Analysis Report
Safe Bulkers, Inc (SB): Free Stock Analysis Report
Seaspan Corporation (SSW): Free Stock Analysis Report
Morgan Stanley (MS): Free Stock Analysis Report
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