We recently published a list of 11 Best Marine Shipping Stocks to Invest in Now. In this article, we are going to take a look at where Matson, Inc. (NYSE:MATX) stands against other best marine shipping stocks to invest in now.
According to Dr. Shashi Kumar of the US Naval Institute, geopolitical developments tend to have a greater impact on the highly volatile shipping market compared to market forces. Since the 2007–08 financial crisis, the broader global shipping market continues to face a series of new challenges. However, the challenging conditions this industry faced in 2024 were unmatched over the past decade and a half, says Kumar. The year’s challenging conditions included the prolonged war in Ukraine, wanton Houthi attacks in the Red Sea as well as increased tensions in the South China Sea. Kumar also noted that container ships decided to avoid the Suez Canal and chose to transport goods around southern Africa, which increased transit time and greenhouse gas emissions. Despite this, the owners of these container ships saw a profitable year.
What Lies Ahead for Marine Vessels Market?
The marine vessels market is expected to reach US$133.63 billion by 2030 from US$111.10 billion in 2024, as per Research and Markets. While global trade continues to fuel the demand for different types of ships, the military navy growth has also been lending support to expand the market. Notably, the requirement for larger and more versatile vessels stems from the demand for efficient transportation of goods. Also, increasing passenger and tourism needs continue to fuel fleet expansion and technology upgrades.
The firm believes that several cruise lines have been adding more ships to cater to the needs of travelers focusing on unique experiences. Overall, the strategic fleet renewal remains critical for market improvement. New and fuel-efficient vessels have been supporting to meet environmental standards and lower costs, says Research and Markets. The transition towards sustainable shipping practices continues to become more critical to obey the international rules targeting reduced emissions.
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Cargo Vessels Segment Is Expected to Lead Growth
Research and Markets believes that cargo vessels continue to become a critical part of commercial shipping. Such vessels tend to play a vital role in global trade by transporting numerous goods across the seas. With the demand for faster and more reliable shipping increasing, the broader industry remains focused on adopting new technologies. Notably, modern navigation systems, eco-friendly fuels, and automation tend to enhance efficiency, improve safety, and reduce the environmental impact. Therefore, as global trade has been expanding, cargo vessels remain critical when it comes to international commerce and economic growth.
Our Methodology
To list the 11 Best Marine Shipping Stocks to Invest in Now, we used a screener to shortlist the companies catering to the broader marine shipping industry. Next, we mentioned the hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiments.
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 the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A processional line of imposing cargo ships in a large port, capturing the scope of the company’s ocean transportation business.
Matson, Inc. (NYSE:MATX)
Number of Hedge Fund Holders: 36
Matson, Inc. (NYSE:MATX) is engaged in the provision of ocean transportation and logistics services. Stephens analysts upped the company’s price objective to $175, up from the prior target of $165, while maintaining an “Overweight” rating. The adjustment came after the company’s strong Q4 2024 earnings, which exceeded expectations. Notably, Matson, Inc. (NYSE:MATX)’s 4Q 2024 EPS came in at $3.80. Moving forward, the company anticipates that elevated freight rates in its China service will persist into Q1 2025.
Beyond the first quarter, Matson, Inc. (NYSE:MATX)’s China service rates are expected to be driven by the timing of trade flow normalization in the Red Sea, as well as other geopolitical factors, supply chain activity, and the trajectory of the US economy. In the near term, Matson, Inc. (NYSE:MATX) expects continued economic growth in Alaska, aided by a low unemployment rate, job growth as well as continued oil and gas exploration and production activity. In Q4 2024, the operating income for the company’s Logistics segment sat at $10.1 million, or $1.2 million higher as compared to the level achieved in Q4 2023. The increase was mainly because of a higher contribution from supply chain management. The company anticipates Ocean Transportation operating income for Q1 2025 to be significantly higher than the $27.6 million witnessed in Q1 2024.
The London Company, an investment management company, released Q2 2024 investor letter. Here is what the fund said:
“Matson, Inc. (NYSE:MATX) – MATX ocean freight services are benefiting from rising shipping rates and improving market conditions. Global ocean freight pricing has been driven up by the ongoing disruption in the Red Sea, coupled with ramping peak season demand and healthier trade volumes. MATX’s success since the onset of the pandemic has led to permanent volume additions in the China trade lane, a transformed balance sheet. and significant share count reduction. MATX remains strategically positioned as a US Jones Act shipping operator and its expedited freight service continues to offer an attractive value proposition for its customers.”
Overall, MATX ranks 2nd on our list of best marine shipping stocks to invest in now. While we acknowledge the potential of MATX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than MATX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
