Shipping's earnings season is kicking into high gear, with eight US-listed owners across operating sectors scheduled to report results over the next five days and confront equity analysts, who will have plenty of questions ready.
And there is the small matter of the US presidential election looming as a substantial wild card for shipping equities, which suffered through a dismal preceding week with an average 9.5% loss.
Only one shipping company of the 30 New York listings under coverage of investment bank Jefferies avoided a loss last week.
But lead shipping analyst Randy Giveans is looking forward and sharpening his pencil for the owners reporting in the next few days, which include the largest public crude tanker owner, Euronav, and the biggest in clean products, Scorpio Tankers.
Both shipowners have been navigating low rates from a traditionally weak third quarter made worse by inventory destocking. But it is the current quarter and forward outlook that interests Jefferies more, as well as strategic adjustments to the companies' balance sheets.
"Rates booked to date this quarter should be better than broker-report averages," Giveans said of the two large-scale owners.
For Belgium's Euronav, a giant in the VLCC and suezmax sectors, Giveans is looking to see how it will use cash generated from stronger markets earlier this year, which he sees as "balancing share repurchases and dividends, as their share price is very cheap".
He is also looking for any guidance from the Hugo de Stoop-led owner as to its decision in October to charter in two suezmaxes from trader Trafigura at two years for $25,000 a day, a rare move seen as showing the owner's confidence that the market will rebound from current trough rates.
For Scorpio, there are also balance sheet issues. Giveans is looking for any updates on Scorpio's $250m shares repurchase programme announced in September, as well as its announced plans to hold calls with fixed-income investors linked to bond sales.
The market will also hear from two smaller tanker owners, mixed-fleet player International Seaways and products specialist Ardmore Shipping. Both have stock buyback programmes, while Ardmore has been the subject of perpetual consolidation chatter.
On the dry side, two US-based owners, Connecticut's Eagle Bulk Shipping and New York's Genco Shipping & Trading, will be stepping to the plate.
In each case, Giveans wants to gauge whether the owner has an appetite for a large-scale acquisition of secondhand bulkers.
Although he did not elaborate, it is public knowledge that US-listed Scorpio Bulkers is considering en-bloc transactions as it looks to rev up its disposition of more than 40 vessels in the kamsarmax and ultramax sectors. Scorpio is moving out of dry bulk to enter the wind turbine installation vessel market.
Containerships have been the bright spot of the traditional market sectors in recent weeks, and Capital Product Partner and Danaos Corp will have some positives to discuss as they report earnings.
Jefferies wants to see how the recent strength translates into potential time charters ranging from one to three years. Capital may update on plans for its distributions or potential acquisitions, while Danaos also has a large stock-buyback programme in place.
As for last week's performance, shipping's 9.5% drop was significantly worse than an awful week for the broader stock market in the US, measured by a 5.6% drop in the S&P 500.
Every shipping operating sector lost ground, with LPG and dry bulk the worst at 13% and 12%, respectively.
The damage was largely attributed to demand fears connected with further Covid-19 lockdowns and shipping's outsized exposure.
