Danske Bank has suggested investors take a look at Wilh Wilhelmsen, Frontline, BW LPG and Avance Gas at a time when shipping has become an unpopular sector.
Promise of a potential special dividend from the separate listing of Treasure is a carrot for investing in Wilh Wilhelmsen ASA, Danske Bank said as it upgraded the company from hold to buy.
The bank’s annual shipping handbook also highlighted BW and Avanace as short term investment ideas given the anticipation of a strong summer market.
Frontline was singled out due to expectations of significant returns this year with the crude tanker market forecast to stay strong in 2016.
Its comments came at a time when global shipping stocks have fallen by 15% in the year to date.
“Shipping has a dilemma, with strong cash returns not having an impact on asset values,” the report said.
“We argue that eventually cash flows will win and should lift the sector higher when the macro turmoil cools off, as we hope it will, and risk appetite returns.”
Danske’s longer term tips include Golden Ocean. The bank's analysts explain a 1986 style scenario is playing out and very good returns could be secured long term.
