New York-listed shipping stocks will be going for their fourth-consecutive week of gains when trading starts on Monday after climbing an average 9.4% last week.
Randy Giveans, the lead shipping analyst at Jefferies, sees a chance for shipping to make it a month of profits this week, with tankers especially primed for further escalation.
“For the week ahead, it’s hard to bet against tankers, especially as more headlines come out about onshore storage filling up and time charter rates continue to improve,” Giveans told TradeWinds.
Momentum continued last week for the 10 tanker companies under Jefferies’ coverage, with an average gain of 18% amid robust spot rates.
Dry bulk stocks were the losers on the week with an average 2% drop, but Giveans thinks that could change.
“I would also expect dry bulk to rebound as the market seems to be on the other side of the bottoming process,” Giveans said.
Despite the winning streak, the 30 listings under Giveans' coverage are still down 36% year to date, and that includes any dividend payments. Shares took a beating in the first quarter on factors including the coronavirus outbreak.
All but one company has lost money, and that is Nordic American Tankers (NAT), the suezmax specialist founded and led by Herbjorn Hansson. Including dividends, it is up 21% on the year.
NAT was even stronger last week, leading all the listings with a 45% gain on extremely high trading volumes.
“Suezmax spot rates cracked the eye-catching $100,000-per-day level,” Giveans said.
“Even though Euronav and Teekay Tankers have more suezmaxes than NAT, momentum and retail investors continued to boost NAT shares.”
He pointed to Hansson's return to CNBC’s “Mad Money” financial show as a factor in the jump.
NAT is the only tanker company trading above net asset value (NAV) in Jefferies’ estimation.
One of the week’s most interesting numbers stories came as both Scorpio Bulkers' 27.3% jump and Scorpio Tankers' 26.6% increase put them among the top-five gainers.
Scorpio Bulkers was the only dry bulk owner to log a substantial gain, but it was based on its 4.4m shares holding in sister Scorpio Tankers. Investors were able to make an indirect play on the tanker market through a dry company trading far below NAV.
Otherwise, bulker owners were the week’s worst performers, with Genco Shipping & Trading slumping 13.3%, Eagle Bulk Shipping dropping 8.1% and Diana Shipping falling 5.1%.
