While millions of citizens are trapped in their homes with no end to the lockdown insight, countless shipping companies are near-equally gimped. China’s zero COVID policy has resulted in a quarantine that’s lasted over a month, and while locals are undeniably suffering under the government’s attempt to eradicate the coronavirus, the marine shipping industry has had to contend with overloaded ports, port worker shortages, and either goods stranded at warehouses or immensely long loading times depending on the cargo.
TORM Plc (NASDAQ: TRMD)
Danish energy and petroleum carrier TORM Plc is off to a strong 2022, like most tanker stocks. Rates for tankers carrying petroleum products have climbed immensely over the last few months, but the Shanghai lockdown has caused all shipping stocks to take a beating. TORM surpassed its EPS estimates for the fourth quarter of 2021, and TRMD shares are up just under 15% year-to-date. Both revenue and net income have risen significantly over the last year (62,69% and 79,52% consecutively), but the month of May’s extended lockdown caused stock to slip by almost 10% to an opening price of $10.31 as of the second week of the month.
Wall Street analysts have set an average price objective of $14.50 for TORM Plc with a low forecast of $9.37 and a high of $17.67. When one considers TORM’s performance in lure of the lockdown and how tanker stocks are likely to be experiencing their best year in a very long time, the current low looks like a potentially lucrative entry point for new traders or those increasing their investment. At the current low, there’s a 30% potential upside.
Castor Maritime Inc (NASDAQ: CTRM)
Castor Maritime Inc. is primarily a dry bulk shipper, with twenty out of twenty-nine vessels in its fleet made up of dry bulk carriers and the rest tankers. The Cyprian shipping company is currently benefiting from an upward trend of the Baltic Dry Index (BDI) that started in January 2022, which it relies on to set its rates for the shipping of dry bulk goods. The BDI has been climbing, and so have CTRM shares. Year-to-date, Castor Maritime is up 15%, which is tremendous growth compared to the -57.79% slippage over the last consecutive year. At an opening price of $1.89, Castor Maritime stock is down 11.56% over the last month, which places it just above its 52-week low of $1.
On March 31st, Castor reported $20 million net income over the last three months elapsed as compared to $1.1 million over the same period a year ago. Revenue was also up to $54.6 million as opposed to just $7 million in 2021. The company attributes the recently passed quarter, which coincidentally is the best quarter to date, to the recovery of charter rates and the bustling activity of the dry bulk market. CTRM shares have a price forecast of $2.629 by the end of the year, according to technical analysis by WalletInvestor, with the highest likelihood of surging once the $1.827 resistance level is breached. That’s 49% potential growth from a company that secured $55 million in funding for 2022 to help fuel growth. So far, the investment seems to be paying off, which makes the current lockdown dip a great point to acquire stock.
EuroDry Ltd (NASDAQ: EDRY)
Grecian dry cargo shipper EuroDry Ltd. entered 2022 strong. After reporting full-year results for 2021, revenue was up by 189% over the previous year, and net income rose to $31.2 million from a loss of $5.9 million. Year-to-date, EDRY shares have risen a whopping 67.75% as of the second week of May, and the company appears poised to ride its bullish momentum even further. EuroDry will be divulging its next earnings report on May 19th, and as the date grows closer, there’s no sign of growth slowing down even though Shanghai’s lockdown is holding fast.
Industry analysts across-the-board have been upping their EuroDry stock forecasts resulting in a 55% rise in the median forecast. Not only did Zacks recently set a $40 price objective, but they also upgraded EuroDry shares to a ‘Buy’ while the Maxim group upped their forecast to $57 in April as well. As of the second week of May, EuroDry Ltd. has an average price objective of $51, with a high of $57 and a low of $45. If experts are accurate, EDRY shares could climb well above their 52-week high of $44.99. Gains of 24.4% to 40% are on the cards, and with a P/E ratio of just 2.88x, stock is presently dirt cheap.
Grindrod Shipping Holdings Ltd. (JSE: GSH)
The year 2021 brought record profit for Grindrod Shipping Holdings Ltd., and 2022 appears to be bringing shares close to a breakout. With a fleet of 31 drybulk carriers and one tanker, the dry bulk shipper exceeded analyst estimates upon reporting its earnings on February 16th. Revenue reached $118.51 million instead of the $114.86 forecast and reported $2.75 EPS as opposed to the $2.50 anticipated. At an opening price of 41 750 ZAC (+-$25.91) as of the second week of May, Grindrod stock is just 2% away from its 52-week high and looks ready to shatter its ceiling and climb even higher.
GRIN shares are currently rated as bullish and identified as a potentially profitable investment for short-term “trend” investors. Zacks classifies Grindrod Shipping Holdings Ltd. as a ‘Strong Buy’ that’s unlikely to retrace soon. We advise any new short-term investors to keep a close eye on Grindrod, while those holding until at least the end of the year are looking at a median price target of $28.50 set by Wall Street analysts, with a high of $31 expected and a potential low of $26. No matter how you look at it, growth is on the cards for GRIN, especially after Shanghai shipping returns to normal.
Euroseas Ltd. (NASDAQ: ESEA)
Euroseas Ltd., which runs a fleet of eighteen container carriers, is currently trading midway between its 52-week range. As of the second week of May, the Greek shipping company’s stock is down 32.2% over the last six consecutive months and 9.39% year-to-date. Despite acquiring two additional intermediate size container vessels in May and riding the rebound of higher charter rates since January, shares have still dwindled, which brings them to their lowest price since December 20th 2021. The May 10th opening price of $24.67 reflects a very reasonable PE ratio of 3.84x as compared to the industry average of 4.27x, but this doesn’t necessarily mean now is the time to buy.
Potential investors should keep in mind that there’s been a significant rise in short interest lately. As of April 15th, short interest rose to 19.1%, and roughly 7.6% of Euroseas Ltd. shares were sold short, with a short-interest ratio of 1.7 days reflected. The increase in short interest combined with recent analyst downgrades to ‘Hold’ by Zacks leads us to believe that ESEA will drop further before turning and beginning to move toward its price objective for the year. Expert analysts have set an average price forecast of $51.50, with a low of $49 and a high of $54 anticipated. As of May, ESEA shares have dropped 9.39% year-to-date and a massive 32.2% over the last six months, but, for the time being, it appears unlikely that they’re done slipping.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only