Can shipping shares resurface after rough start?
With the first half in the rearview mirror, it’s time to take stock of shipping shares. How did they fare, particularly the tanker equities that stole the spotlight?
FreightWaves ran the numbers on the larger U.S.-listed ship owners — and not to rub salt in the wound, but the numbers are ugly.
Among the larger companies, the best-performing stock by far is Nordic American Tankers (NYSE: NAT), an owner of Suezmax tankers (tankers that carry 1 million barrels of crude).
The worst performer by far is Scorpio Bulkers (NYSE: SALT), which hit a fresh 52-week low on both Monday and Tuesday.
Scorpio’s executive team of Emanuele Lauro and Robert Bugbee is not having a good year on Wall Street — their product-tanker company, Scorpio Tankers (NYSE: STNG), also hit a 52-week low on Tuesday.
Jon Chappell, transportation analyst at Evercore ISI, issued a dire new assessment on tanker stocks in general. “The promise of a golden age for the tanker market has once again faded into oblivion,” he wrote on Tuesday.
“Tanker stocks have already sold off 33%-85% from 52-week highs and most trade at mere fractions of NAV [net asset value]. Broader institutional support of this sector will not emerge as long as there are brief super spikes directly followed by long downturns, which is where the industry stands today,” said Chappell.
The high-low spectrum
Tanker and dry bulk stocks are much closer to annual lows than highs in comparison to the broader market indices. As of Monday’s closing bell, most of the larger U.S.-listed ocean shipping stocks were within 30% of their lows, whereas the Dow, S&P 500 and NASDAQ were within 30% of their 52-week highs.
Tanker stocks were closer to lows than dry bulk stocks. The outlier among shipping stocks was NAT, which was 37% above its annual low.
Tanker and dry bulk basket averages not market-cap-weighted. Tankers = TNK, STNG, DSSI, INSW, DHT, FRO,
NAT. Bulkers = SALT, EGLE, GNK, BDRY, GOGL, SBLK
....MUCH MORE
Related:
Shipping: "Floating storage play is unwinding but effects are far from over"
Bulk Shipping: Japan to Close 100 Coal Fired Power Plants (bets big on Mozambique LNG)
With The Baltic Dry Index Up For Twenty Straight Sessions Will The Gamblers Who Wagered On Tankers Bet On Bulkers?
Not me.ICYMI—Shipping: "Tanker Rates Crash as OPEC+ Cuts Near. Tanker Owners Reman Bullish"
A third-derivative trade on the demand for steel in China is just a bit too esoteric.
Simpler to lose your money in Shanghai rebar futures, less thinking required.
[rebar is rolling over after a nice little run-up]
