In this article, we will take a look at the 10 Best Shipping and Container Stocks To Buy.
Before the invention of the intermodal shipping container, goods were shipped in various-sized boxes that workers had to load and unload from ships manually. This method was inefficient, expensive, and time-consuming, making it difficult to transfer cargo across different modes of transport. The introduction of the first standardized intermodal shipping container in the 1950s revolutionized world trade. Approximately 90% of globally traded goods rely on maritime transportation, and the volume of maritime trade is projected to triple by 2050 due to rising demand. With the growth of the world economy over the past decades, the volume of freight transported by ships has also increased. In 2021, about 1.95 billion metric tons of cargo were shipped globally, up from approximately 0.1 billion metric tons in 1980. Consequently, the global container fleet has expanded significantly. Between 1980 and 2022, the deadweight tonnage of container ships grew from about 11 million metric tons to roughly 293 million metric tons.
However, this growth comes with increasing risks to shipping. Due to its global nature, the shipping container industry is vulnerable to several natural phenomena, including tropical storms, inland flooding, sea-level rise, drought, and extreme heat. According to CNBC, citing a study by RTI, climate change impacts on ports—including damage and disruptions—could cost the shipping industry up to $10 billion annually by 2050 and up to $25 billion per year by 2100.
Over the past few months, global trade has faced setbacks due to disruptions in two crucial shipping routes. Attacks on vessels in the Red Sea region hindered traffic through the Suez Canal, the primary maritime link between Asia and Europe, typically handling around 15% of global maritime trade volume. Meanwhile, on the other side of the globe, a severe drought at the Panama Canal led authorities to enforce restrictions, significantly reducing daily ship crossings since October of last year. This slowdown has impacted maritime trade through another vital chokepoint, typically responsible for about 5% of global maritime trade.
According to the International Monetary Fund (IMF) high-frequency transit estimates, trade volume passing through the Suez Canal witnessed a 50% year-over-year drop in the first two months of the year, while trade volume using the Cape of Good Hope detour surged by an estimated 74% above last year’s level. Meanwhile, transit trade volume through the Panama Canal decreased by almost 32% compared to the previous year. Additionally, data indicates a 6.7% year-over-year decline in port calls to the 70 ports tracked in sub-Saharan Africa for January and February 2024. Similar declines were observed in areas such as the European Union, the Middle East, and Central Asia, with decreases of 5.3%. These reductions likely stem from the temporary effects of longer shipping times. Should these interferences persist, they could temporarily disrupt some supply chains and exert upward pressure on inflation in the affected countries.
That said, the global container shipping market, valued at $2.2 trillion, remains up for significant expansion in the coming years. According to a research report, the market is projected to reach $134.03 billion by 2029, demonstrating a compound annual growth rate (CAGR) of 3.11% from 2024 to 2029. In addition, the rise of e-commerce has underscored the importance of end-to-end supply chain visibility, prompting shippers to leverage technology for real-time tracking of cargo and tankers. This e-commerce boom is driving the demand for faster and more cost-efficient shipping solutions, with the global e-commerce logistics market expected to experience a CAGR of over 17.8% from 2022 to 2033.
Sheila Fitzgerald/Shutterstock.com
Our Methodology
For our list of the best shipping and container stocks to buy, we selected the following names based on hedge fund sentiment toward each stock. We assessed the sentiment using Insider Monkey’s database of 919 elite hedge funds tracked as of the end of the first quarter of 2024. The list is arranged in ascending order based on the number of hedge fund holders for each firm. Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Shipping and Container Stocks To Buy
10. Danaos Corporation (NYSE:DAC)
Number of Hedge Fund Holders: 13
Danaos Corporation (NYSE:DAC) provides marine and seaborne transportation services, specializing in the containership sector. Founded in 1972 by Dimitris Coustas, the company is headquartered in Piraeus, Greece.
Danaos Corporation (NYSE:DAC) reported a strong start to 2024 with its first-quarter financial results. Although adjusted net income slightly decreased compared to the same period last year, the company saw a significant increase in its contracted revenue backlog, which now stands at $2.5 billion. Adjusted EPS for Q1 2024 was $7.15, with an adjusted net income of $140 million.
As of Q1 2024, Danaos Corporation (NYSE:DAC) shares were held by 13 of the 919 hedge funds tracked by Insider Monkey, with total holdings valued at $47.3 million. The largest hedge fund shareholder is Jeff Osher’s No Street Capital.
9. Costamare Inc. (NYSE:CMRE)
Number of Hedge Fund Holders: 14
Costamare Inc. (NYSE:CMRE), a global leader in container ship ownership and charter services, operates as a Greek and Marshall Islands corporation. The Konstantinos Konstantakopoulos-led company recently reaffirmed its commitment to dry bulk fleet renewal and a focus on larger tonnage in the sector. Earlier this year, Costamare Inc. (NYSE:CMRE) announced the sale of nine ships, ranging from 32,400 dwt to 56,670 dwt and built between 2006 and 2012. Five of these bulkers have already been sold, generating net proceeds of nearly $33 million after debt prepayments, while the remaining four are expected to bring in approximately $26 million.
For the first quarter of this year, the company reported adjusted earnings per share of $0.63, surpassing analyst expectations by $0.03. Revenue for the quarter was $470.17 million, significantly exceeding the consensus estimate of $299.92 million. This reflects a substantial improvement in both earnings and revenue, with the reported revenue representing an 89% increase compared to the same quarter last year. This strong year-over-year growth can be attributed to improved charter rates and strategic fleet employment, with Costamare Inc. (NYSE:CMRE) securing 97% and 80% of its containership fleet for 2024 and 2025, respectively.
At the end of Q1 2024, Costamare Inc. (NYSE: CMRE) was included in the portfolios of 14 investors, with total stakes valued at $23.9 million. As of the end of the March quarter, the largest shareholder in the company was Murray Stahl’s Horizon Asset Management.
8. Golden Ocean Group Limited (NASDAQ:GOGL)
Number of Hedge Fund Holders: 16
Golden Ocean Group Limited (NASDAQ:GOGL) specializes in the ownership and operation of dry bulk vessels, managing a fleet that includes Newcastlemax, Capesize, Panamax, and Ultramax vessels to transport bulk commodities such as ores, coal, grains, and fertilizers. The company also engages in chartering, purchasing, and selling vessels.
On May 23, Golden Ocean Group Limited (NASDAQ:GOGL) announced its financial results for the first quarter of 2024. The company reported an adjusted EBITDA of $114.3 million, down slightly from the previous quarter’s $123.2 million, while its net income came in at $65.4 million, resulting in earnings per share of $0.33. Despite the decrease in EBITDA, Golden Ocean declared a dividend of $0.30 per share for the quarter.
According to Insider Monkey’s database for the first quarter, 16 hedge funds held stakes totaling $99.08 million in Golden Ocean Group Limited (NASDAQ:GOGL), down slightly from 17 funds with $68.5 million in the previous quarter. The largest stakeholder was Jeremy Hosking’s Hosking Partners, holding 1.39 million shares valued at $18.12 million.
7. Genco Shipping & Trading Limited (NYSE:GNK)
Number of Hedge Fund Holders: 16
Genco Shipping & Trading Limited (NYSE:GNK) specializes in the global ocean transportation of dry bulk cargoes. The company’s fleet of dry bulk carrier vessels is chartered to various entities, including commodities traders and government-owned organizations.
In Q1 2024, Genco Shipping & Trading Limited (NYSE:GNK) reported a significant rise in net income to $18.8 million, or $0.44 per basic share and $0.43 per diluted share, a substantial increase from $2.6 million, or $0.06 per share, in the same period last year. This strong performance was driven by a robust 38% year-over-year increase in Time Charter Equivalent (TCE) revenue, reflecting effective fleet management and favorable market conditions. The company’s revenue for the quarter was $117.4 million, significantly exceeding analyst estimates of $81.24 million. On the other front, Genco Shipping & Trading Limited (NYSE:GNK) has maintained its strategic focus on shareholder returns, declaring a quarterly dividend of $0.42 per share, marking the company’s 19th consecutive payout.
According to Insider Monkey’s first quarter database of 2024, 16 hedge funds held bullish positions in Genco Shipping & Trading Limited (NYSE:GNK), with combined stakes valued at $45.3 million, the same as the previous quarter valued at $40.4 million. The positive hedge fund sentiment makes Genco Shipping & Trading Limited (NYSE:GNK) one of the best shipping and container stocks to buy.
6. Ardmore Shipping Corporation (NYSE:ASC)
Number of Hedge Fund Holders: 16
Ardmore Shipping Corporation (NYSE:ASC), based in Bermuda, specializes in the global seaborne transportation of petroleum products and chemicals. The company serves oil majors, oil and chemical traders, and pooling service providers.
The Irish tanker owner recently partnered with maritime AI specialist Deepsea Technologies to implement Pythia, a voyage optimization tool, across Ardmore’s fleet. This initiative supports Ardmore Shipping Corporation (NYSE:ASC)’s energy transition plan for its tramp business. After a full-scale, 12-month trial, the technology demonstrated a promising reduction in fuel consumption and emissions.
Several equity analysts have recently commented on the company, with Jefferies raising their price target for Ardmore Shipping Corporation (NYSE:ASC) from $20.00 to $21.00 alongside a “buy” rating in a report on May 8th. This comes as Ardmore reported better-than-expected earnings of $0.92 per share and a dividend of $0.31 per share. Following the earnings call, the stock price surged to a 52-week high above $20 per share. Throughout much of 2023, the stock had languished between $12 and $14 before beginning its upward trajectory around the year-end into January of the current year.
According to Insider Monkey’s data, 16 hedge funds were bullish on Ardmore Shipping Corporation (NYSE:ASC) at the end of the first quarter, the same as the preceding quarter. The largest position holder is Chuck Royce’s Royce & Associates, with 778,931 shares valued at $12.79 million.
5. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 17
Global Ship Lease, Inc. (NYSE:GSL) owns and operates containerships, offering high-specification, mid-size, and smaller vessels to liner shipping companies. These vessels are utilized under a balanced mix of both longer-term and short-term charters.
On May 16, Jefferies raised the price target for Global Ship Lease, Inc. (NYSE:GSL) shares to $29.00 from the previous target of $26.00, while reiterating a Buy rating on the stock. This upgrade follows the company’s strong performance in the first quarter, during which it added $54.6 million to its substantial contracted revenue backlog, now totaling $1.6 billion. Global Ship Lease, Inc. (NYSE:GSL) is well-positioned to benefit from rising charter rates, with 20 of its ships scheduled to become available in 2024. The company also declared a regular dividend of $0.375 per share and repurchased $5 million of its shares during the quarter.
According to Insider Monkey’s Q1 2024 database, 17 hedge funds held bullish positions in Global Ship Lease, Inc. (NYSE:GSL), compared to 19 in the prior quarter. The largest stakeholder is David Salanic’s Whitefort Capital, with approximately 1.97 million shares valued at $40.13 million. The positive hedge fund sentiment around the stock has earned Global Ship Lease, Inc. (NYSE:GSL) a spot among the top five on our list of the best shipping and container stocks.
4. Nordic American Tankers Limited (NYSE:NAT)
Number of Hedge Fund Holders: 18
Nordic American Tankers Limited (NYSE:NAT) is an international tanker company that specializes in the ownership, operation, and chartering of Suezmax tankers for crude oil transportation. The company utilizes bareboat charters, time charters, and spot charters to operate its vessels.
Recently, Nordic American Tankers Limited (NYSE:NAT) reported underwhelming Q1 results, with the company’s GAAP EPS for the period coming in at $0.07, missing estimates by $0.04. Revenue fell 30.5% year-over-year to $60.57 million, missing estimates by $5.62 million. However, the tanker company generated $37.6 million in cash from operating activities. Despite challenges in international waters causing shipping traffic disruptions, Nordic American Tankers Limited (NYSE:NAT) managed to double its dividend to $0.12 per share earlier in February.
According to Insider Monkey’s database, 18 hedge funds held stakes in Nordic American Tankers Limited (NYSE:NAT) at the end of 2024. The largest stakes are owned by John Overdeck and David Siegel’s Two Sigma Advisors.
3. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Number of Hedge Fund Holders: 23
Star Bulk Carriers Corp. (NASDAQ:SBLK) provides maritime transportation solutions specializing in the dry bulk sector. The company’s fleet transports major bulks like iron ore, minerals, and grain, as well as minor bulks such as bauxite, fertilizers, and steel products.
In May 2024, Star Bulk Carriers Corp. (NASDAQ:SBLK) announced its financial results for the first quarter, reporting a net income of $75 million and an adjusted net income of $73 million, equating to $0.87 adjusted earnings per share.
In addition, the company completed a merger with US-based Eagle Bulk Shipping in an all-stock deal back in April, creating the world’s largest publicly listed bulker owner. The combined corporation will continue to operate under the name Star Bulk Carriers and be headquartered in Athens. Under the terms of the deal, each Eagle shareholder received 2.6211 shares of SBLK common stock for each share of Eagle common stock owned.
According to Insider Monkey’s review of 919 hedge fund portfolios for the March quarter of 2024, 23 hedge funds had invested in Star Bulk Carriers Corp. (NASDAQ:SBLK). The largest investor among them was Howard Marks’ Oaktree Capital Management, which held $145.79 million worth of shares.
2. Matson, Inc. (NYSE:MATX)
Number of Hedge Fund Holders: 26
Matson, Inc. (NYSE:MATX), headquartered in Honolulu, Hawaii, is an American shipping and navigation services company founded in 1882. Its subsidiary, Matson Navigation Company, provides ocean shipping services across the Pacific, serving destinations such as Hawaii, Alaska, Guam, Micronesia, the South Pacific, China, and Japan. On April 25, Matson declared a second-quarter dividend of $0.32 per common share, payable on June 6, 2024, to shareholders of record as of May 9, 2024.
Norway’s Kongsberg Maritime secured a contract to supply a range of integrated technologies for three new 3600-TEU LNG-powered containerships being built at Philly Shipyard for Matson Navigation at the beginning of May. The scope of supply includes a shaft generator system, a battery energy saving system, and a complete power management system. In 2022, Matson, Inc. (NYSE:MATX) ordered these three LNG-powered Aloha Class containerships from Philly Shipyard for about $1 billion and expects to take delivery of these Jones Act compliant vessels in the fourth quarter of 2026, with subsequent deliveries in 2027. According to the shipping company, the 260-meter Aloha Class vessels will be the largest containerships ever built in the US.
The number of hedge funds holding stakes in Matson, Inc. increased to 26 in Q1 2024, up from 23 in the previous quarter, with a consolidated value of over $107.57 million.
Meridian Growth Fund stated the following regarding Matson, Inc. (NYSE:MATX) in its fourth quarter 2023 investor letter:
“Matson, Inc. (NYSE:MATX is a US-based ocean and logistics company with a leading position in Pacific shipping that provides a vital lifeline to Hawaii, Alaska, and Guam, as well as premium and expedited service from China to the US. Matson’s unique terminal assets give it a significant speed advantage over competitors, which has been especially valuable amid supply chain disruptions. Matson’s premium service has enabled the company to keep its fleet utilization strong at a significant rate premium which has led to stronger-than-expected earnings. In addition, Matson continues to generate strong free cash flow which has enabled the company to pay down debt, repurchase shares and invest in high-return projects, including fleet additions and upgrades. During the quarter, we trimmed our position as the share price appreciated based on our valuation discipline.”
1. Kirby Corporation (NYSE:KEX)
Number of Hedge Fund Holders: 26
Established in 1921 and based in Houston, Texas, Kirby Corporation (NYSE:KEX) is a leading operator in the domestic tank barge industry. Its Marine Transportation segment specializes in transporting bulk liquid products, including petrochemicals, black oils, refined petroleum products, and agricultural chemicals.
Kirby Corporation (NYSE:KEX) reported a strong start to 2024, with first-quarter earnings surpassing analyst estimates. The company announced earnings per share (EPS) of $1.19, which was $0.21 higher than the consensus estimate of $0.98. Revenue for the quarter also exceeded expectations, totaling $808 million compared to the forecasted $778.55 million.
On May 21, Stifel increased the price target for Kirby Corporation (NYSE:KEX) shares to $132, up from the previous $131, maintaining a Buy rating on the stock. This adjustment followed a visit by Stifel analysts to Kirby’s Distribution and Services (D&S) business in Houston, where they focused on the power generation segment and toured the manufacturing facilities. The analysts noted that Kirby’s D&S business is often viewed as ancillary and cyclical, tied to the upstream oil and gas industry, which contrasts with the company’s core barge business.
The shipping heavyweight ranks first on our list of the best shipping and container stocks as Insider Monkey’s first-quarter database revealed that 26 hedge funds were bullish on Kirby Corporation (NYSE:KEX), down slightly from 27 in the previous quarter.
While we acknowledge the potential of Kirby Corporation (NYSE:KEX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
