Major VLCC owner DHT Holdings is set to kick off another week of quarterly earnings after US-listed shipping stocks outpaced the broader market indices with strong gains.
Pure-play VLCC owner DHT is expected to report fourth-quarter earnings of $0.10 per share after markets close on Monday in New York, despite a rough patch in which tanker owners are seeing continued inventory destocking replacing the winter rates rally.
Any upside surprise could build on the momentum of last week, in which all 30 of the stocks under coverage of investment bank Jefferies gained value.
The average gain of 11.6% easily outpaced strong weeks by the S&P 500, which was up by 4.6%, and the small-cap Russell 2000 index, which rose by 7.7%.
"It was a green wave – it was a risk-on week across the board," said Jefferies lead shipping analyst Randy Giveans.
Eyes on DHT and Ardmore
Now comes DHT's turn to report its earnings, and then on Wednesday another tanker entry, Irish product-tanker specialist Ardmore Shipping.
DHT is the only tanker company Jefferies expects to turn a profit for the fourth quarter, although is estimate of a $0.10 result per share is slightly lower than the analyst consensus.
"We'll be looking to see what their spot rates are to date in the first quarter, and also whether DHT has signed any additional charters to take more coverage during this weak market," Giveans told TradeWinds.
Jefferies also will be following any additional colour from the owner, led by co-CEOs Svein Moxnes Harfjeld and Trygve Munthe, on the recent acquisition of two 2016-built VLCCs from Awilco Eco Tankers for $68m each last month.
"Lastly, we'll ask about any dividend and share-repurchase updates," Giveans said.
In Ardmore's case, Jefferies is expecting a loss of $0.42 per share while the "street" view is a slightly worse $0.44.
As with DHT, Jefferies will look for first-quarter bookings to date and any further charter coverage for the Anthony Gurnee-led owner.
"The other two topics for discussion will be on consolidation opportunities and share repurchase updates," Giveans said.
Last week's performance
The two shipowners will have to follow a week in which things couldn't have gone much better for the US-listed stocks.
Such was investor enthusiasm that buyers ignored a further drop in capesize rates to send shares up 19% – the most of any operating sector. Investors appeared to focus on the longer game of demand recovery later in 2021.
Everyone joined the party, as containerships rose 13%; tankers by 12%, LNG 5% and LPG owners 2%. Investors again decoupled from rate movements in every sector but boxships.
Safe Bulkers and Navios Maritime were the week's stars, with gains of 36.2% and 25.7%, respectively, while downtrodden Diamond S Shipping made a rare appearance near the top with 21.8% gain, after Spanish investor Cobas Asset Management revealed a 5% stake.
