New York-listed Eneti has seen a wind shift in its shares movement after a four-day slide upon confirmation of its $326m newbuilding order at South Korea's Daewoo Shipbuilding & Marine Engineering (DSME).
As TradeWinds reported earlier, the Scorpio Group-backed owner has signed a contract for a second wind turbine installation vessel (WTIV) at DSME with specifications quite similar to the initial order. The vessels are to deliver in 2024 and 2025, respectively.
Eneti shares had bounced as high as $8.10 in Thursday morning trading on the New York Stock Exchange, a rise of some 3.5% from Wednesday's close. This came after four consecutive declines from a 24 November close of $9.14, the stock's recent high-water mark.
The Emanuele Lauro-led owner, formerly the dry trade's Scorpio Bulkers, had plenty of company in black numbers on Thursday after shipping stocks sold off badly Wednesday on confirmation of the first Omicron Covid-19 case in the US.
"You're getting a decent amount of yesterday's losses back today," said Jefferies lead shipping analyst Randy Giveans, who cautioned against making too much of one-day moves in a climate destablised by Covid worries and increasing inflation fears in the US.
"In general, shipping stocks are a higher beta (volatility) trade than the small-cap Russell 2000 index, which in turn is higher beta than the S&P 500, which contains names like Amazon, Apple, Facebook and Google," Giveans said.
"On bad days, shipping is going to underperform the Russell, which is the better comparison, and on good days like today, it's going to overperform," adding that "cooler heads" were back in the trade.
Both the Dow Jones Industrial Average and the Russell were up about 1.5% in morning trading, while a number of shipping stocks across sectors were doing better than that.
International Seaways in the crude trade, Scorpio Bulkers in clean products and Star Bulk Carriers in dry bulk all saw gains in the 3% range to open trading. Israeli liner operator Zim was up more than 2%.
In the Eneti case, the stock also was supported by repeated buys in the open market from president Robert Bugbee, who on Wednesday paid out more than $1.6m to secure 200,000 shares.
The owner said its latest newbuilding is an NG-16000X design by GustoMSC and includes a 2,600-tonne leg encircling crane. The vessel is capable of installing up to 20 turbines at depths of up to 65 metres of water, and it can be adapted to operate on LNG or ammonia.
