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Shipping industry at the start of a two-year rally, Morgan Stanley says

  • Dry bulk shippers surged today on Morgan Stanley’s analysis which said shipping is at the start of a two-year rally; Diana Shipping (DSX), Safe Bulkers (SB), Navios Maritime Holdings (NM), Knightsbridge Tankers (VLCCF) and Star Bulk Carriers (SBLK) all rose 7%-13%.
  • Rates should rally on lower fleet growth and expectation that demand will expand at a faster pace than vessels in 2014 for the first time in six years, Stanley's Fotis Giannakoulis predicts.
  • The analyst sees a 12-to-18 month window to play the cycle, with the industry’s recovery lasting two years, followed by a rising vessel supply.
Comments (8)
  • gharr101
    , contributor
    Comment (1) | Send Message
     
    agree
    13 Dec 2013, 10:08 PM Reply Like
  • bones2180
    , contributor
    Comments (48) | Send Message
     
    Heard this 3 times in 2013
    So I guess we get to hear it all over again for 2014
    One year they"ll get it right
    13 Dec 2013, 11:20 PM Reply Like
  • bones2180
    , contributor
    Comments (48) | Send Message
     
    Heard this 3 times in 2013
    So I guess we get to hear it all over again for 2014
    One year they"ll get it right
    13 Dec 2013, 11:20 PM Reply Like
  • bones2180
    , contributor
    Comments (48) | Send Message
     
    Heard this 3 times in 2013
    So I guess we get to hear it all over again for 2014
    One year they"ll get it right
    13 Dec 2013, 11:20 PM Reply Like
  • bones2180
    , contributor
    Comments (48) | Send Message
     
    Heard this 3 times in 2013
    So I guess we get to hear it all over again for 2014
    One year they"ll get it right
    13 Dec 2013, 11:20 PM Reply Like
  • cm1701
    , contributor
    Comments (52) | Send Message
     
    @Bones2180- Your comment seems to have repeated itself 3 times. Clever.

     

    Snark aside- I firmly believe that StarBulk is where /how to play this Shipping rise. The firm has newer ships (some just purchased) which are much more fuel efficient- as well as ships under management. I'm with Howard Marks- and will stay long as long as he does. He sold a little- but still holds a good deal of $SBLK stock.

     

    Star Bulk's stock price is also right in the sweet spot- Over 4 so that the big institutional boys can play- but still low enough that it has to run.

     

    My only concern now would be dilution- but since a stock offering was several months back- which paid for new efficient ships- I'm confident 2014 will be a strong year for $SBLK.
    14 Dec 2013, 11:35 AM Reply Like
  • chadm
    , contributor
    Comments (35) | Send Message
     
    I think SB has the most upside and least risk. They have one of the newest fleets in the industry and good leadership. While I think everyone of them will need to issue stocks to raise capital to grow their fleets with new/ more efficient ships, I think SB is ready now to really capitalize and it will show in their earnings in 2014. I jumped on SB in 2013 and they've been good... I suspect a double in 2014.
    14 Dec 2013, 01:54 PM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    "when in doubt go long shipping." what news is in this sector that hasn't already been priced in? these moves make no sense on a fundamental, demand driven basis.
    14 Dec 2013, 08:57 PM Reply Like
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