This past month has seen the Baltic Dry Index take off, and along with it, the stock prices for dry bulk shippers. While the industry as a whole has benefited from this rise in prices, and likely helped to thwart off bankruptcy for some of the shippers, some may not be able to survive if the rate falls. It's time to take a look at analyst expectations for the shippers and find out who's the best. All the data used for this analysis came from Yahoo! Finance.
The first factor I looked at was the Buy/Sell recommendations. With a 1 being a strong Buy, and a 5 being a strong Sell, the analysts seem to believe Navios Maritime Holdings Inc. (NYSE:NM) and Safe Bulkers, Inc. (NYSE:SB) are the strongest. The biggest sell recommendations are Genco Shipping & Trading Ltd. (GNK) and Eagle Bulk Shipping, Inc. (NASDAQ:EGLE).
The next factor to look at is how many other people are betting on the company. While analysts are bearish on GNK, the company has the second highest percentage of insider ownership. And while NM is a favorite among the analysts, owners possess 25% of the stock. Analysts are pessimistic about NM, and owners don't seem to be betting on their company either. Institutional investors and Mutual Funds believe that GNK and Diana Shipping Inc. (NYSE:DSX) are worth betting on, and own close to half of each company. DryShips, Inc. (NASDAQ:DRYS) and DSX both have the highest number of institutions holding shares.
Earnings and Growth Estimates
Analysts put DRYS as having the most upside for earnings growth in the next year at 236% with NM also predicted to have growth of 125%. On the flip side, NMM looks to have the least upside potential.
Analysts have yet to fully absorb the significant increases in the Baltic Dry Index, and so these numbers represent a pre-surge analysis. And while each of these companies will have different exposure to the Baltic Dry Index, their analyst recommendations, insider and institutional ownership, and estimates all reflect their relative strength. DRYS, GNK, NM, and SB each have a strong case for a Bullish recommendation, while EGLE and NMM are signaling more of a Bearish signal.
When looking at the performance of these stocks in the past month, GNK, DRYS, and EGLE all come out on top. While I'm Bearish on EGLE, and it has surged as part of the Baltic Dry Index, I think that is because of how pessimistic investors were towards it and the upside the surge presented.