Shipping companies need to hit ten figure market caps if equity prices are to rise, Team Tankers head Hans Feringa said.
Feringa, speaking on a panel on chemical tankers at Capital Link’s International Shipping Forum in New York Monday, told attendees part of the reason shipping stocks are trading so poorly versus their net asset values is because “microcaps are not sexy.”
“Microcaps in the US are really $3bn,” he said. “You need to get over $1bn to get institutional investors [to buy in].”
Only a handful of New York-traded shipping stocks are over that threshold — most notably John Fredriksen vehicles Frontline and Ship Finance International, along with Golar LNG and GasLog — but none are above $2.1bn, save Kirby at $4.6bn.
Most have market capitalisations in the mid to high nine figure range. A few are in the tens of millions.
Feringa's Oslo-traded Team Tankers comes in at $145m (NOK 1.25 bn).
To improve, Feringa said shipowners need four things.
“You need to be focused. Sorry, it’s tough to be a conglomerate and get full value. Have scale. Those two things should give you liquidity,” he said. “Good governance aligns shareholders with management and management with shareholders. That is not always the case.
“There are very few people who do those four things. I think it’s incumbent upon current public companies to make corrections.
“We need to press on, professionalise and get to at least that $1bn market cap and the professionalism that goes with it.”
