Shipping stocks saw gains across the board Tuesday, with each sector having at least one owner post significant gains despite the coronavirus overhang.
Tony Gurnee-led tanker owner Ardmore Shipping Corp, which posted its first dividend since 2016 on $2.5m in adjusted profit, saw the biggest share gain, jumping 17.4% to close at $6.23.
"Ardmore Shipping had decent results," Noble Capital Markets analyst Poe Fratt told TradeWinds.
Other owners in that sector also saw their stock jump as well. Navios Maritime Acquisition equities leapt 13.6% to close at $5.27, while Scorpio Tankers shares gained 7.6% to reach $23.79.
The dry bulk sector also had a positive day, led by Navios Maritime Holdings stock recording a 15.1% improvement to $3.59. Eagle Bulk Shipping's shares moved up 10.1% to $3.37.
Vale to the rescue
"I think that the news on Vale helped" bulker shares, Fratt said.
He said the Brazilian iron-ore giant maintained full-year guidance despite heavy rains expected for the first quarter, implying that shipments will ramp up over the rest of the year.
Vale lowered first-quarter iron-ore production outlook to between 63m and 68m tonnes from 68m to 73m tonnes but still expects to put out 340m to 355m tonnes in 2020, Fratt said.
"Despite the slow start to the year, Vale maintained full-year 2020 production guidance ... assuming that they are able to obtain government approval to restart some mines," he said.
Fratt also mentioned that Scorpio Bulkers president Robert Bugbee bought 7,300 call options expiring Dec 2020 with a strike price of $3 for about $0.9m.
Boxships also ended the day with higher share prices. Danaos Corp, which on Monday posted a $33.8m profit for the fourth quarter, saw its stock improve 8.9% to $6.27.
Out of 50 shipping stocks, only three saw declines. Cape owner Seanergy slipped 14% to $0.30, diversified owner Pangea Logistics fell 1.3% to $3.08 and diversified Performance Shipping dropped 2.4% to $0.80.
Shipping stocks have risen for a “combination of reasons”, including news on coronavirus abating, crude oil prices increasing and rates improving Tuesday, Jefferies analyst Randy Giveans said.
“As for it continuing, I think the equities have bottomed and further improvement is likely ... but it won’t be a straight shot up”, he told TradeWinds.
“Expect continued volatility with up days followed by down days, but equities should trend higher from these ridiculous lows.”
The Dow Jones Industrial Average remained flat at 29,276.
