Shipping stocks as represented by the Guggenheim Shipping ETF (SEA) have been strong this year, up almost 15% YTD. The shipping group includes dry bulk shippers such as Dryships Inc. (DRYS), that transport bulk cargo items such as ore or food staples; oil tankers such as Frontline Ltd (FRO), Newlead Holdings Ltd. (NEWL), and Top Ships Inc. (TOPS), that transport crude oil, petroleum products, liquefied petroleum gas and chemicals; containership shipping companies such as Alexander & Baldwin Inc. (ALEX) that carry their entire load in truck-size containers; and shipping logistics companies such as Sino-Global Shipping America, Ltd. (SINO).
In this article, via an analysis based on the latest available institutional 13-F filings, we identify shipping company stocks that are being accumulated and those being distributed by legendary or guru fund managers. The legendary or guru fund managers included, such as Warren Buffett, George Soros, Carl Icahn, Steven Cohen and Mario Gabelli, are well-known for their savvy in picking winning stocks year after year. Taken together, these guru fund managers are bearish on the group, cutting a net $40 million in Q4 from their $792 million prior quarter holdings in the group (for more general information on these guru funds, please look at the end of the article).
The following are two shipping companies that these guru fund managers are most bullish about, and that also have a high dividend yield (see Table for more companies they added):
Ship Finance Intl Ltd. (SFL): Ship Finance provides tanker transportation services for crude and refined oil products, dry bulk and containerized cargoes. Guru funds together added $2 million to their $1 million prior quarter position in Q4, with the top guru fund buyer being guru John Buckingham's mutual fund company Al Frank Asset Management ($2.2 million), also the top holder at $2.6 million.
SFL shares have been among the top gainers in the group this year, up about 27% YTD, almost double the 15% average gain for its peers in the group. At 9.3%, it also has among the highest dividend yields in the group, and much higher than the 1.0% average for its peers. The stock is also undervalued, trading at 8 forward P/E and 1.2 P/B compared to averages of 9.1 and 0.5 for its peers in the shipping group, while earnings are projected to rise modestly from $1.53 in 2011 to $1.61 in 2013.
Teekay LNG Partners LP (TGP): TGP is a Marshall Islands partnership that provides international marine transportation services for LNG and crude oil. Guru funds together added a new $1 million position in Q4, with the top guru fund buyer being legendary billionaire investor Ken Griffin's Chicago-based hedge fund Citadel Advisers ($0.4 million), and the top holders being SMid-cap focused value investors Keeley Asset Management, with $4.8 billion in 13-F assets ($0.6 million) and Citadel Advisers ($0.5 million).
TGP shares are up about 24% YTD, and currently trade in all-time high territory, at a current 22.2 P/E (on a TTM basis) and 2.5 P/B compared with the averages of 9.1 and 0.5 for its peers in the shipping group, while earnings are projected to rise at 9.6% annual rate from $1.84 in 2011 to $2.21 in 2013. Also, it has a higher 6.6% dividend yield than the 1.0% average for its peers in the group.
The following are some additional shipping companies that guru fund managers accumulated in Q4 (see Table):
- Alexander & Baldwin , that provides containership freight services between the U.S. Pacific Coast ports, Hawaii, and Marshall Islands, in which guru funds together added a net $11 million in Q4 to their $278 million prior quarter position in the company; and
- Scorpio Tankers Inc. (STNG), that provides marine transportation services for crude oil and petroleum products, in which guru funds together added a net $4 million in Q4 to their $11 million prior quarter position in the company.
Besides these, guru fund managers based on their Q4 trading activity indicated that they are bearish on the following shipping companies (see Table):
- Kirby Corp. (KEX), engaged in inland and offshore marine transportation, and the overhaul and repair of diesel engines and related parts, in which guru funds together cut a net $13 million in Q4 from their $172 million prior quarter position;
- Teekay Corporation (TK), that provides international crude oil and petroleum product transportation services with a current fleet of 150 vessels, in which guru funds together cut a net $7 million in Q4 from their $58 million prior quarter position;
- Genco Shipping & Trading (GNK), a provider of international tanker transportation services for iron ore, coal, grain and steel with a fleet of 49 vessels, in which guru funds together cut out completely in Q4 their $6 million prior quarter position;
- Golar LNG Ltd. (GLNG), that provides international marine transportation services for liquefied natural gas, in which guru funds together cut a net $6 million in Q4 from their $71 million prior quarter position;
- Navios Maritime Holdings (NM), that provides seaborne shipping and logistics services for dry bulk cargo, in which guru funds together cut a net $3 million in Q4 from their $4 million prior quarter position;
- Overseas Shipbuilding Group (OSG), that is a provider of shipping transportation services for crude oil and petroleum bulk products, in which guru funds together cut a net $3 million in Q4 from their $42 million prior quarter position; and
- DryShips Inc. , a Greece-based owner and operator of drybulk carriers that operate worldwide, in which guru funds together cut a net $1 million in Q4 from their $4 million prior quarter position.
Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.