In this article, we will take a look at the 5 best shipping and container stocks to buy now. To read our analysis of the recent market trends, and market activity, you can go to the 10 Best Shipping and Container Stocks to Buy Now.
5. Eagle Bulk Shipping Inc. (NASDAQ:EGLE)
Number of Hedge Fund Holders: 18
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) is a Stamford, Connecticut-based owner and operator of dry bulk vessels focused on the mid-size segment. Its fleet consists of 27 Ultramax vessels and 26 Supramax vessels, including an Ultramax vessel to be delivered to the company in Q4 2022.
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) has a significantly more resilient top and bottom line mainly due to the nature of its fleet which belongs to the Ultramax and Supramax category of vessels. Due to their smaller size, these vessels are less exposed to rates volatility more commonly associated with Capesize vessels that are prone to changes in Chinese steel output.
In addition, the company benefits from lower operational costs for its fleet due to an average fleet age of 9.5 years and the fact that 48 of its vessels are scrubber-fitted which significantly lowers its fuel costs.
In October 2021, the board of directors of Eagle Bulk Shipping Inc. (NASDAQ:EGLE) instituted a dividend program targeting a minimum payout equal to 30% of the net income. The quarterly dividend of $2.20 per share conforms to this program. Its shares had a dividend yield of 17.79%, as of October 17.
On October 10, B. Riley analyst Liam Burke lowered the price target on Eagle Bulk Shipping Inc. (NASDAQ:EGLE) shares to $72 from $82 and maintained a ‘Buy’ rating for the shares.
As of Q2 2022, 18 of the 895 hedge funds tracked by Insider Monkey owned shares of Eagle Bulk Shipping Inc. (NASDAQ:EGLE), valued at $253 million. Its largest shareholder was Howard Marks’ Oaktree Capital Management with ownership of 3.8 million shares valued at $196 million.
4. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Number of Hedge Fund Holders: 18
Athens, Greece based Star Bulk Carriers Corp. (NASDAQ:SBLK) is a leading global shipping company that provides worldwide seaborne transportation of major bulks. Its fleet comprises of 128 vessels, with an aggregate capacity of more than 14 million DWT, consisting of Newcastlemax, Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax and Supramax vessels.
Similar to other shipping companies, Star Bulk Carriers Corp. (NASDAQ:SBLK) also pays a significant portion of its dividends in the form of dividends. In August, its board of directors declared a quarterly dividend of $1.65 per share. Its shares had a dividend yield of 32.31%, as of October 17.
On September 26, Jefferies analyst Omar Nokta lowered the price target on Star Bulk Carriers Corp. (NASDAQ:SBLK) shares to $26 from $30 and maintained a ‘Buy’ rating for the shares. Even though steel and iron ore demand has been impacted by slowdown in the economy of China, coal shipments are still expected to remain on an upward trend for the short to medium term.
According to the Insider Monkey data on 895 leading hedge funds, 18 hedge funds were long Star Bulk Carriers Corp. (NASDAQ:SBLK) shares as of Q2 2022, with the total shares held by hedge funds valued at $784 million. Howard Marks’ Oaktree Capital Management was the largest hedge fund shareholder with ownership of 26 million shares valued at $650 million.
3. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 19
Based in Haifa, Israel, ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is a leading global, asset-light container liner shipping company. It operates a fleet of close to 100 vessels, nearly all chartered-in, mostly in short-term charter arrangements which allows the company to adjust its capacity to meet changing market conditions, optimize vessel deployment, ensure high utilization of vessels, and exploit specific trade advantages.
In August, ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) released its financial results for the second quarter of 2022. Its revenue increased by 44% y-o-y to $3.4 billion, while net income surged by 50% y-o-y to $1.3 billion. It generated a normalized EPS of $11.07 for the quarter, missing the consensus estimates by $2.18.
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) intends to follow a dividend policy to distribute nearly 30% of the net quarterly income of first three quarters of the year to its shareholders with cumulative annual dividends representing 30-50% of annual income. In this lieu, the company declared a cash dividend of $4.75 per share for the quarter. Its shares had a dividend yield of 105.53%, as of October 17.
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is among the favorite shipping stocks of hedge funds, with 19 of the 895 hedge funds tracked by Insider Monkey holding its shares valued at $479 million. Arrowstreet Capital is its biggest shareholder with ownership of 3.8 million shares valued at $178 million.
2. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 20
London-based, Global Ship Lease, Inc. (NYSE:GSL) is a leading independent owner of containerships with a diversified fleet of mid-sized and smaller containerships. The company owns 65 containerships, ranging from 1,118 to 11,040 TEU, including 32 ships that are wide beam post-Panamax.
As of October 17, Global Ship Lease, Inc. (NYSE:GSL) shares are down 24.44% year-to-date. Following the drop in its share price, its shares had a dividend yield of 8.67%, as of the same date. Based on the low payout ratio of 16%, the company has the potential to continue dividend payments despite the economic downturn in the medium term.
Global Ship Lease, Inc. (NYSE:GSL) also benefits from its operating model which provides it resilience against changes in shipping rates. The company does not handle the point-to-point logistics for its vessels and instead leases these ships out to global liner companies which isolate it from the volatility in freight rates.
As of Q2 2022, 20 of the 895 hedge funds tracked by Insider Monkey were long Global Ship Lease, Inc. (NYSE:GSL), holding shares worth $111 million. Israel Englander’s Millennium Management was the largest shareholder with ownership of 1.3 million shares valued at $22 million.
1. Kirby Corporation (NYSE:KEX)
Number of Hedge Fund Holders: 23
Houston, Texas-based Kirby Corporation (NYSE:KEX) is the premier tank barge operator in the United States, transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, along all three U.S. Coasts, and in Alaska and Hawaii.
On October 24, Kirby Corporation (NYSE:KEX) released the financial results for the third quarter of 2022. Its total revenues increased by 25% y-o-y to $746 million, while it reported a net income of $39 million, compared to a net loss of $265 million in Q3 2021. It generated a normalized EPS of $0.65 for the quarter, exceeding the analyst consensus by $0.06.
As of Q2 2022, Kirby Corporation (NYSE:KEX) was the most sought-after stock among hedge funds on our list of 10 best shipping and container stocks to buy now, as 23 of the elite hedge funds tracked by Insider Monkey held its shares, valued at $297 million. Ric Dillon’s Diamond Hill Capital was its largest hedge fund shareholder with ownership of 1.8 million shares valued at $112 million.
You may also like to read ARK Invest Stock Portfolio: Top 10 Picks and 11 Best High-Dividend Stocks Under $100
