1. Kirby Corporation (NYSE:KEX)
Number of Hedge Fund Holders: 32
Kirby Corporation (NYSE:KEX) is Texas-based and operates in the U.S. marine transportation sector, particularly through its extensive operations involving tank barges. It transports a wide range of bulk liquid products, including petrochemicals, black oil, refined petroleum products, and agricultural chemicals.
According to our database, 32 hedge funds held stakes in Kirby (NYSE:KEX) in the second quarter, with positions worth $659.739 million. As of June 30, with 887,384 shares of the company, valued at $106,246 million, Encompass Capital Advisors is the largest shareholder of the company. It takes the top position on our list of the best marine shipping stocks to invest in.
The company’s service network covers critical waterways, including the Mississippi River System, the Gulf Intracoastal Waterway, and all three U.S. Coasts. Due to this, it has an advantage in a market where efficient and reliable transport of liquid commodities is essential.
The scale of Kirby’s (NYSE:KEX) operations is noteworthy. According to the company, its inland tank barge fleet alone constitutes around 27% of the U.S. market as it has 1,093 tank barges that collectively have a capacity of 24.2 million barrels, supported by 287 towboats.
Additionally, its coastal fleet, while smaller, adds further capacity with 28 tank barges and 25 tugboats, along with four offshore dry-bulk cargo barges and associated tugboats. The substantial fleet not only allows the company to meet diverse transportation needs but also enables it to capitalize on various market opportunities.
David Grzebinski, the CEO, expressed optimism about the company’s recent performance, attributing strong results in the first half of the year to effective operations and favorable market conditions. The company is projecting significant net cash from operations, estimated between $600 million and $700 million for 2024. The strong cash flow is important as it provides the company with the financial flexibility to invest in its infrastructure and services.
Capital spending is expected to range from $300 million to $330 million, which includes essential investments in maintenance and improvements to both inland and coastal marine equipment. Approximately $200 million to $240 million is earmarked for these maintenance activities, which ensures that Kirby’s (NYSE:KEX) operations remain efficient and competitive.
Furthermore, the allocation of about $90 million for growth initiatives suggests that the company is not just maintaining its current capabilities but is also looking to expand and improve its services across both marine transportation segments.
While we acknowledge the potential of Kirby Corporation (NYSE:KEX) to grow, our conviction lies in the belief that 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 promising and trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
