ZIM Integrated: New Shipping Act Will Not Hurt Long-Term Profitability
Summary
- In my last article on ZIM, I explained why the stock is a long-term buy. Based on my estimations, ZIM is worth more than $65 per share.
- A 28% drop happened in three days as investors expect Congress to vote soon on the Ocean Shipping Act of 2022, which will ban carriers from leaving U.S. ports with empty containers.
- ZIM’s revenues will not be hurt by the new act. The company operates on a global scale. It can reallocate its vessels to benefit from the market condition.
- Also, 43% of the company’s trade exposure by carried TEU is immune to the Ocean Shipping Act of 2022.
- I expect the freight rate from the U.S. to Asia and Europe will increase soon.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of ZIM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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