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Shipping Industry Rises 20.6% in 6 Months: More Room to Run?
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The Zacks Transportation - Shipping industry is benefiting from the upbeat liquefied petroleum gas (LPG) demand. The buoyant demand scenario pertaining to the export of LPG, like propane, has served the U.S. economy well. The country is the largest exporter of gases like propane and butane. This has boosted the prospects of transporters of LPG. Notably, seaborne LPG gas volumes have been on the rise since the pandemic.
With the reopening of the China economy, the entire shipping industry heaved a sigh of relief. Notably, ocean shipping is hugely dependent on China. This is because China is not only a key manufacturing hub but also sees significant demand for goods and services, courtesy of the country’s large population.
Additionally, as fuel expenses represent a key input cost for any transportation player, the fall in oil prices bodes well for the bottom-line growth of shipping stocks. Notably, oil prices declined 1% in the past six months.
Partly due to these aforementioned tailwinds, the industry has gained 20.6% in the past six months, outperforming the S&P 500 Index’s northward movement of 16.4% and an 8.1% rise of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Despite such positives, the shipping industry continues to grapple with issues like inflationary pressures, resultant high interest rates and supply-chain disruptions.
Investing in Shipping Stocks: A Prudent Idea
Given this encouraging backdrop, we present three shipping stocks,Teekay Tankers Ltd. (TNK - Free Report) , Danaos Corporation (DAC - Free Report) and Diana Shipping Inc. (DSX - Free Report) , which investors can bet on.
The aforementioned stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy), a VGM Score of A or B and a solid expected earnings growth rate for the current year. These stocks have also witnessed upward estimate revisions in the past 90 days. Additionally, these stocks have a strong trailing four-quarter average earnings surprise history.
Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities for investors. The selected companies appear to be compelling investment propositions at the moment.
Teekay Tankers: Headquartered in Hamilton, Bermuda, Teekay Tankers offers marine transportation services to oil industries in Bermuda and internationally. TNK is gaining from the resumption of economic activities and the uptick in world trade. This is because the shipping industry is responsible for transporting several goods involved in world trade.
Teekay presently carries a Zacks Rank #2 and has a VGM Score of A. The Zacks Consensus Estimate for TNK’s 2024 earnings has moved up 61.4% in the past 90 days. TNK has a trailing four-quarter earnings surprise of 2.78%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
TNK has a market capitalization of $1.90 billion.
Danaos: Based in Piraeus, Greece, Danaos owns and operates containerships in Australia, Asia, Europe, and the United States. The company provides seaborne transportation services, such as chartering its vessels to liner companies.
Danaos currently carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for DAC’s 2024 earnings has moved up 7.3% in the past 90 days. Its expected earnings growth rate for 2024 is 9.8%. DAC has a trailing four-quarter earnings surprise of 3.50%, on average.
DSX presently carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for DSX’s 2024 earnings has moved up 4.2% in the past 90 days. DSX has a trailing four-quarter earnings surprise of 5.73%, on average.
DSX has a market capitalization of $338.07 million.
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Shipping Industry Rises 20.6% in 6 Months: More Room to Run?
The Zacks Transportation - Shipping industry is benefiting from the upbeat liquefied petroleum gas (LPG) demand. The buoyant demand scenario pertaining to the export of LPG, like propane, has served the U.S. economy well. The country is the largest exporter of gases like propane and butane. This has boosted the prospects of transporters of LPG. Notably, seaborne LPG gas volumes have been on the rise since the pandemic.
With the reopening of the China economy, the entire shipping industry heaved a sigh of relief. Notably, ocean shipping is hugely dependent on China. This is because China is not only a key manufacturing hub but also sees significant demand for goods and services, courtesy of the country’s large population.
Additionally, as fuel expenses represent a key input cost for any transportation player, the fall in oil prices bodes well for the bottom-line growth of shipping stocks. Notably, oil prices declined 1% in the past six months.
Partly due to these aforementioned tailwinds, the industry has gained 20.6% in the past six months, outperforming the S&P 500 Index’s northward movement of 16.4% and an 8.1% rise of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Despite such positives, the shipping industry continues to grapple with issues like inflationary pressures, resultant high interest rates and supply-chain disruptions.
Investing in Shipping Stocks: A Prudent Idea
Given this encouraging backdrop, we present three shipping stocks, Teekay Tankers Ltd. (TNK - Free Report) , Danaos Corporation (DAC - Free Report) and Diana Shipping Inc. (DSX - Free Report) , which investors can bet on.
The aforementioned stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy), a VGM Score of A or B and a solid expected earnings growth rate for the current year. These stocks have also witnessed upward estimate revisions in the past 90 days. Additionally, these stocks have a strong trailing four-quarter average earnings surprise history.
Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2, offer the best investment opportunities for investors. The selected companies appear to be compelling investment propositions at the moment.
Teekay Tankers: Headquartered in Hamilton, Bermuda, Teekay Tankers offers marine transportation services to oil industries in Bermuda and internationally. TNK is gaining from the resumption of economic activities and the uptick in world trade. This is because the shipping industry is responsible for transporting several goods involved in world trade.
Teekay presently carries a Zacks Rank #2 and has a VGM Score of A. The Zacks Consensus Estimate for TNK’s 2024 earnings has moved up 61.4% in the past 90 days. TNK has a trailing four-quarter earnings surprise of 2.78%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
TNK has a market capitalization of $1.90 billion.
Danaos: Based in Piraeus, Greece, Danaos owns and operates containerships in Australia, Asia, Europe, and the United States. The company provides seaborne transportation services, such as chartering its vessels to liner companies.
Danaos currently carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for DAC’s 2024 earnings has moved up 7.3% in the past 90 days. Its expected earnings growth rate for 2024 is 9.8%. DAC has a trailing four-quarter earnings surprise of 3.50%, on average.
DAC has a market capitalization of $1.36 billion.
Diana Shipping: Headquartered in Athens, Greece, Diana Shipping offers shipping transportation services.
DSX presently carries a Zacks Rank #2 and has a VGM Score of B. The Zacks Consensus Estimate for DSX’s 2024 earnings has moved up 4.2% in the past 90 days. DSX has a trailing four-quarter earnings surprise of 5.73%, on average.
DSX has a market capitalization of $338.07 million.