Dry Bulk Shippers on Full Throttle - A Name to Watch

These dry bulk shippers are going crazy. I have been taking some profits after an 80% rise in Genco Shipping & Trading (GNK) over the past 3 months, but I think I may be early. The estimates are coming up fast. A name that is a bit cheaper than GNK, Euroseas (ESEA) has caught my eye. I think a swap may be in order here.

An analyst at Jefferies had a succinct piece which I quasi-paraphrased below. This is a good outline of the investment thesis behind the dry bulk carriers. More information on my take is in an early post I made on GNK in my private blog.

The day rates for drybulk vessels -- which carry items including grain, iron ore, cement and steel -- surpassed expectations in the second quarter by an average of 13 percent, on coal demand and port congestion, according to analyst Douglas J. Mavrinac. And he expects the trend to continue.

"With shipping demand expected to intensify over the next six to twelve months, we believe port congestion will continue to restrict the available supply of ships despite the efforts of port authorities to reduce waiting times, adding further upward pressure to charter rates," the analyst said. Mavrinac raised price targets on drybulk stocks by an average of 31 percent, and raised the second-quarter and full-year estimates for most players.

Comments

[dgdatta:]

yes..dry bulk ESEA is worth investing..especially they cud successfully raised the puchase of dry bulk money @ 13.50 per share bringing the book value of the sahres at 6$.The shares are likely to be notices as PE ratio is one of the lowest amonsgst the peers..
Five star investing..
rgds
Dilip New Zealand

2007 Jul 21 03:35 AM