It’s no secret that shipping companies have been some of the biggest beneficiaries in this market environment. This period of high inflation and supply chain disruption has made the reliance on transportation more significant than ever for consumers and businesses alike. The recent imbalance between supply and demand caused by the lingering pandemic has only exacerbated the issue.
The shipping industry is comprised of companies that transport cargo around the world. We’re going to focus on ocean transportation and marine shipping. These companies move products like appliances, electronics, consumer goods, as well as commodities and raw materials. Due to surges in global trade, shipping companies have witnessed a substantial improvement in terms of volumes and revenues. There’s also been a shortage in the global vessel supply, which increases the value of the companies that own these vessels.
These companies are able to pass along higher costs to consumers. And as we’ve seen this year, consumers are absorbing these price increases. Even in the face of a 40-year high in inflation, consumers are still whipping out their wallets and spending at record levels.
While pandemic-related lockdowns in Asia have somewhat subsided for the time being, delivery delays have resulted in massive backlogs that will take some time to work themselves out. This demand will remain in place and serve as a main driver of growth moving forward. Aside from the need for physical stores to keep their shelves stocked, the ongoing rise of the e-commerce industry is also a significant driver that will provide a boost for shipping companies for years to come.
The Zacks Transportation – Shipping industry is currently ranked in the top 13% out of over 250 industries. This group has widely outperformed the market with at 45.6% return year-to-date. The industry is also relatively undervalued as we can see below:
Image Source: Zacks Investment Research
Historical research has illustrated that roughly half of a stock’s future price movement can be attributed to its industry group. By focusing on stocks within the top industries, we can provide a constant ‘tailwind’ to our investing success. Let’s take a look at a leading stock within this industry group.
Eagle Bulk Shipping Inc.
Eagle Bulk Shipping is engaged in ocean transportation of dry bulk cargoes globally. EGLE owns and operates a fleet of over 50 vessels that transport products like coal, fertilizers, steel, iron ore, and cement. The company serves miners, producers, and end users. Eagle Bulk Shipping was incorporated in 2005 and is based in Stamford, CT.
A Zacks Rank #2 (Buy) stock, EGLE has exceeded earnings estimates in two of the past four quarters. The marine shipping company most recently reported Q1 EPS back in May of $3.97, a 0.25% beat over the consensus estimate. The stock has been gradually trending upward, advancing nearly 80% this year while the market has been in a correction.
Eagle Bulk Shipping Inc. Price, Consensus and EPS Surprise
Analysts have been steadily increasing earnings estimates. For the current quarter, EPS estimates have been raised 21.53% to $4.46, which would represent growth of 69.58% relative to Q2 of last year. Looking at the year as a whole, analysts have also boosted 2022 earnings estimates by 10.09% in the past 30 days. The Zacks Consensus Estimate now stands at $17.90, translating to a 46.96% growth rate versus last year.
Make sure to keep an eye on EGLE and the shipping industry as earnings looks set to skyrocket.
Image: Bigstock
The Wind's at Your Back with This Shipping Sweetheart
It’s no secret that shipping companies have been some of the biggest beneficiaries in this market environment. This period of high inflation and supply chain disruption has made the reliance on transportation more significant than ever for consumers and businesses alike. The recent imbalance between supply and demand caused by the lingering pandemic has only exacerbated the issue.
The shipping industry is comprised of companies that transport cargo around the world. We’re going to focus on ocean transportation and marine shipping. These companies move products like appliances, electronics, consumer goods, as well as commodities and raw materials. Due to surges in global trade, shipping companies have witnessed a substantial improvement in terms of volumes and revenues. There’s also been a shortage in the global vessel supply, which increases the value of the companies that own these vessels.
These companies are able to pass along higher costs to consumers. And as we’ve seen this year, consumers are absorbing these price increases. Even in the face of a 40-year high in inflation, consumers are still whipping out their wallets and spending at record levels.
While pandemic-related lockdowns in Asia have somewhat subsided for the time being, delivery delays have resulted in massive backlogs that will take some time to work themselves out. This demand will remain in place and serve as a main driver of growth moving forward. Aside from the need for physical stores to keep their shelves stocked, the ongoing rise of the e-commerce industry is also a significant driver that will provide a boost for shipping companies for years to come.
The Zacks Transportation – Shipping industry is currently ranked in the top 13% out of over 250 industries. This group has widely outperformed the market with at 45.6% return year-to-date. The industry is also relatively undervalued as we can see below:
Image Source: Zacks Investment Research
Historical research has illustrated that roughly half of a stock’s future price movement can be attributed to its industry group. By focusing on stocks within the top industries, we can provide a constant ‘tailwind’ to our investing success. Let’s take a look at a leading stock within this industry group.
Eagle Bulk Shipping Inc.
Eagle Bulk Shipping is engaged in ocean transportation of dry bulk cargoes globally. EGLE owns and operates a fleet of over 50 vessels that transport products like coal, fertilizers, steel, iron ore, and cement. The company serves miners, producers, and end users. Eagle Bulk Shipping was incorporated in 2005 and is based in Stamford, CT.
A Zacks Rank #2 (Buy) stock, EGLE has exceeded earnings estimates in two of the past four quarters. The marine shipping company most recently reported Q1 EPS back in May of $3.97, a 0.25% beat over the consensus estimate. The stock has been gradually trending upward, advancing nearly 80% this year while the market has been in a correction.
Eagle Bulk Shipping Inc. Price, Consensus and EPS Surprise
Analysts have been steadily increasing earnings estimates. For the current quarter, EPS estimates have been raised 21.53% to $4.46, which would represent growth of 69.58% relative to Q2 of last year. Looking at the year as a whole, analysts have also boosted 2022 earnings estimates by 10.09% in the past 30 days. The Zacks Consensus Estimate now stands at $17.90, translating to a 46.96% growth rate versus last year.
Make sure to keep an eye on EGLE and the shipping industry as earnings looks set to skyrocket.