Genco Shipping and Trading Ltd.

Genco Shipping and Trading Ltd. (GNK - Snapshot Report) is enjoying the benefits of increased demand and strong pricing power, which helped the company produce excellent first quarter results in which both revenue and net income were up significantly. Estimates continue to rise, and the company's share price has responded accordingly, breaking out from just over $65 only two weeks ago and advancing to their current location of over $77.

Genco Shipping & Trading Limited engages in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. It transports iron ore, coal, grain, steel products, and other drybulk cargoes with its fleet of 28 drybulk carriers. The company has a market cap. of $2.22 billion, was founded in 2004 and is based in New York, New York.

Strong First-Quarter Results

Genco shares had already been rallying ahead of the company's first quarter results, released on Apr 30, but the exceptional performance has helped push its stock price even higher. Revenue was up 146% from the same period last year to $91.7 million. Net income took a big jump forward, increasing to $74 million, from $19.8 million last year. $26.2 million of net income came from a one-time gain.

After removing one-time items, this produced diluted earnings of $1.65 per share, ahead of analyst estimates and well ahead of last year's production.

This marks the third time in the last three quarters that Genko has surprised and beaten analyst estimates, having done so by an average of 15 cents, or 15%.

A Bullish Forecast

Driving Genco's solid quarterly results were not just a product of strong demand, but also strong pricing power. The average daily time charter equivalent rates obtained by the company's fleet increased 73.5% to $35,891 per day for the most recent quarter, compared to the same period last year.

As Genco Shipping continues to post solid growth numbers, the analyst community continues to upgrade their earnings projections. Within just the last seven days, the current-year estimate has tacked on 16 cents, moving to its current projection of $7.29 per share.

The Chart

As previously mentioned, GNK shares have been on a nice run after bottoming out below $35 on Jan 16. Since then this stock has raced back to its 52-week and all-time high just above $78. Moving forward, the key to the formation is whether this stock will be able to stabilize in higher territory. We have seen a fair amount of volatility over the past few months, and GNK logged a pretty quick run back into its current territory. If this stock can plant itself and stabilize in higher ground, it bodes well for its short-term trajectory. Take a look at the chart below.

Read the full analyst report on GNK