Shipping shares are continuing a late-2020 reversal of fortunes that sees them outperforming general market indices in New York for the third consecutive week in what may be a larger shift in investor attitudes.
With earnings season drawing to a close this week, the 30 stocks under coverage of investment bank Jefferies closed Friday with a 5.5% gain compared to the prior week.
This was better than the 2.3% advance in the S&P 500 and the 3.9% jump by the Russell 2000 in a week that saw the Dow Jones Industrial Average top 30,000 for the first time and that was interrupted by the Thanksgiving holiday.
There were 25 gainers under coverage of Jefferies lead shipping analyst Randy Giveans and only five stocks losing ground.
Dry bulk had the largest gain by sector at 10% and by individual company as Connecticut-based Eagle Bulk Shipping added 17.6%, with better spot and charter rates and futures contracts all playing into the rally, Giveans said.
Tankers were also strong with a 6% spike, and saw the next-largest gainers with Tsakos Energy Navigation up 15.2% and Ardmore Shipping surging 14.1%.
While Tsakos moved on better than expected earnings, Ardmore benefited from a combination of factors that are working in shipping's favor, Giveans said.
"We're seeing a pop in products tanker day rates, which is helpful to Ardmore," Giveans said.
"Even more so, sentiment continues to shift in the value of economically sensitive, global trade driven, energy related companies, and value stocks…all of which Ardmore fits. The stock has been very oversold, so any incremental news, such as positive vaccine developments, have led to increased bids for the stock."
As TradeWinds has reported, a recent investor "rotation" into energy stocks and other cyclical listings that had been shunned for most of 2020 amid the Covid-19 pandemic has offered hope to depressed shipping listings going forward in 2021.
