Plug Power rises to top industrial gainer, while shipping stocks anchor among losers
Panuwat Dangsungnoen
Power/energy-related stock were among the top gainers for the week ending July 8, while shipping stocks led the decliners' list amid looming fears of recession as the Federal Reserve's policymakers eye up to a 75 basis-point rate hike at their next meeting to fight inflation.
The SPDR S&P 500 Trust ETF (SPY) was back among gains (+3.03%) after being in the red a week ago. YTD, the ETF is -18.17%. The Industrial Select Sector SPDR (XLI) was also in the green (+0.65%), after falling in the prior week. YTD, XLI is -16.92%.
The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +14% each this week. However, YTD, all these five stocks are in the red.
Plug Power (NASDAQ:PLUG) +19.31% took the number one spot again after two weeks. The stock gained throughout the week but the most on July 7 (+7.83%) as solar and clean energy stocks rallied amid U.S. government's plans to lift tariffs on Canadian solar products and China mulling a $220B stimulus package to boost its economy.
However, YTD, the Latham, New York-based company's stock is down -29.97%. The SA Quant Rating on the shares is Sell, which which takes into account factors such as growth and profitability, among others things. The rating is in contrast to the average Wall Street Analysts' Rating of Buy, wherein 14 out of 28 analysts give the stock a Strong Buy rating.
Upwork (UPWK) +17.26% seemed to mirror Plug's stock performance as it came in second, same as two weeks ago. The Santa Clara, Calif.-based company, which provides an online work marketplace, was also among the top five gainers ( in this segment) in June. However, YTD, the stock has shed -29.01%. The SA Quant Rating on the stock is Hold, with Profitability having a factor grade of D+ while Valuation with factor grade of F. But the average Wall Street Analysts' Rating differs and gives the stock a Buy rating, with an Average Price Target of $32.18.
The chart below shows YTD price-return performance of the top five gainers and SP500TR:
Ballard Power Systems (BLDP) +16.03%. The Canadian fuel cell systems developer was among the stocks that gained on July 7 (+9.88%) with the U.S.-Canada accord on removing tariffs for Canadian solar products. The stocks were also helped by a report that solar and wind installations in the U.S. generated more electricity than nuclear power plants for the first time in April. YTD, Ballard has declined -41.80%, the most among this week's top five gainers. The average Wall Street Analysts' Rating for BLDP is Hold, wherein 13 out of 23 analysts backed the stock as Hold. The rating is in contrast to the SA Quant Rating of Sell, with Valuation getting a factor grade of C and Profitability with a factor grade of D-.
Frontier Group (ULCC) +14.73%. At the end of the week came a setback for Frontier as Spirit Airlines (SAVE) postponed a shareholder vote for its acquisition by the company so it could have more time to continue discussions with JetBlue (JBLU). SA contributor Dhierin Bechai wrote: Solely looking at the value of the offers from total and cash perspective, the Frontier offer is unattractive at best. The average Wall Street Analysts' Rating on ULCC is Strong Buy, with an Average Price Target of $16.86, contradicting the SA Quant Rating of Hold. YTD, Frontier's stock has lost -20.78%.
Bloom Energy (BE) +14.55%. The San Jose, Calif.-based Bloom, which provides power generation platform, also gained on the proposed lifting of Canadian solar products tariff. The stock also saw Northland initiate coverage with an Outperform rating calling the company "at an inflection stage" and positioned strongly to use its solid oxide platform. YTD, BE has declined -13.82% but the an average Wall Street Analysts' Rating is Buy, while the SA Quant Rating is Hold.
This week's top five decliners among industrial stocks (market cap of over $2B) all lost more than -5% each. YTD, only one out of these five is in the green.
Golden Ocean (NASDAQ:GOGL) -10.48% led the decliners followed by shipping peers Star Bulk Carriers (SBLK) -10.12% and ZIM Integrated Shipping (ZIM) -5.67%, which took the second and third spot, respectively, amid growing fears of recession. According to an analysis by Germany's IfW economic institute more than 2% of global cargo capacity is at a standstill at the North Sea while there was decline in freight volumes in the Red Sea in June affecting European trade.
"Overall, world trade shows a slightly positive trend in June, but significant congestion, high transportation costs and resulting supply chain woes dampen the exchange of goods," said Vincent Stamer, head of Kiel Trade Indicator.
Stamer, however, added that the situation in North America improved. "The pandemic induced high demand growth for consumer goods has slowed and the congestion off the port of Los Angeles has dissolved," noted Stamer.
The chart below shows YTD price-return performance of the worst five decliners and XLI:
Bermuda-based GOGL has had a relatively better first-half of the year compared to the broader market and certain industrial stocks (in this segment). The stock was among the top five gainers (in this segment) for H1 (+29.48%). The SA Quant Rating on GOGL is a Strong Buy, with Profitability and Valuation both having a factor grade of A+. Meanwhile, the average Wall Street Analysts' Rating is Buy. YTD, the stock is the only one among this week's decliners to be in the green.
Star Bulk — which was among 2021 top five industrial stocks (in this segment) was also back among the losers along with GOGL after two weeks. The SA Quant Rating and the average Wall Street Analysts' Rating on SBLK is Strong Buy. YTD, SBLK is -0.93%.
YTD, ZIM has declined -24.31% but gets an SA Quant Rating of Strong Buy, which is in contrast to the average Wall Street Analysts' Rating of Hold.
ESAB (ESAB) -5.67%. The North Bethesda, Md.-based welding products maker landed the fourth spot among decliners. YTD, the stock has fallen -16.68% but the average Wall Street Analysts' Rating is Buy with an Average Price Target of $57.67.
Brady (BRC) -4.34%. The Milwaukee, Wis.-based company, which makes workplace safety products, has seen its stock decline -16.16% YTD. SA Quant Rating on BRC is a Hold, which is in contrast to the average Wall Street Analysts' Rating of Buy.
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Comments (7)
2- Qtr 1 and 2 are the slow months for shipping. So obviously things slow down, especially with a recession, however rates are STILL near historical highs though they’ve come down some. 3- if you’re only going to focus on price movements of these stocks you should probably mention that $24 of the drop in price of Zim is correlated to the massive dividends they paid out since the high of $90/share. Just something to note. 4- we are going into busy season and there are rumblings of a nation wide train strike (which move all this port cargo) and we have a shortage of about 100k truck drivers. WitH China open again, who is going to move all the containers???? I see last year’s congestion problems ramping up in the coming months, and ZIM along with their peers will continue to print cash faster than the fed. Long ZIM!
