Veteran equity analyst Magnus Fyhr has made a return to shipping coverage with a new bank after an 18-month hiatus.
The comeback sees New York-based boutique investment bank HC Wainwright take up maritime research for the first time.
Fyhr’s sector experience dates back to the early 2000s before the rapid expansion of shipping in the US public markets from 2004 to 2008.
But he has not worked in the space since Seaport Global Securities dropped coverage of 21 shipping stocks in April 2019 while seeing off the analyst.
Fyhr was clearly happy to be back in a phone conversation with TradeWinds, joking about being a cat with nine lives.
Exodus and opportunity
“I’m very excited to team up with HC Wainwright at a time when a lot of other banks have exited the sector,” Fyhr said, adding that the firm has a big presence in areas such as health care and biotech.
“They’ve seen some of the exodus and there’s an opportunity for some of the smaller banks to come in and cover the sector. There are a lot of smaller shipowners out there who are still in need of financing,” Fyhr said.
“We’re going to get ramped up here pretty quickly. We will be back with coverage of the tanker and dry bulk sector and it will be soon.”
Fyhr’s departure from Seaport Global was one of the first in what became a wave of bank exits from maritime, including the likes of Morgan Stanley, JP Morgan, Credit Suisse UBS.
Some smaller names have ventured in, however, with HC Wainwright becoming the latest.
“I think part of the [exits] is the bigger problem of the larger banks trying to figure out how to make money going forward. The bulge bracket banks need a bigger revenue base for trading and underwriting fees,” Fyhr said.
“The boutique or smaller banks can be more nimble in their approach. They tend to bring a much lower overhead when they move into a sector. HC Wainwright has done very well covering healthcare and it makes sense for them to expand.”
Fyhr acknowledged that shipping is largely in a trough overall in public equity markets with investors spooked by the Covid-19 fallout, but said that may be part of the rationale for a play on market recovery.
“Some of these cyclical stocks have been left for dead by investors: just consider that energy stocks used to be 10% of the S&P 500 and it’s dwindled to 1% or 2%,” Fyhr said.
Fyhr brings a long perspective on the industry. During his days with Jefferies, he was among the few analysts covering shipping when investment banker John Sinders helped lead shipowners to a wave of New York listings from 2004.
US footprint
He later was a managing director for Clarkson Capital Markets, where he was instrumental in setting up a broker deal license and expanding the firm’s footprint in the US.
"We are excited to have Magnus join HCW to lead our research effort in the maritime sector, a new focus for the firm," said HC Wainwright chief executive Mark Viklund in a message to TradeWinds.
"HCW has had success taking a contrarian view of certain sectors, looking to build out while competitors are retrenching. We believe that the maritime sector is at that point and that we have the opportunity to create one of the leading franchises."
