The stock market has boomed in the COVID era, driven by fiscal and monetary policy and surging retail-investor interest. Many ocean shipping stocks — with the glaring exception of tanker equities — have followed suit.
Which U.S.-listed shipping stocks rose the most?
Price gains arbitrarily depend on which date range you choose. For shipping, the current one-year range is perhaps the best gauge of stock moves.
Broader equity markets started rebounding in the third week of March 2020, after it became clear that the government’s policy response would boost equities despite the health threat.
The resuscitation of trade-linked stocks ensued a little later. Many shipping shares bottomed around May 2020. Thereafter, it became increasingly obvious that consumers would still spend despite lockdowns, that China — the central driver of ocean shipping — was not going to implode, and that industrial bulk commodities would remain in heavy demand.
Stocks of container liners, container-ship lessors and dry bulk have been on the rise ever since. Not so for crude and product tanker stocks, which have followed a different pricing pattern.
American Shipper used share-price appreciation data from Koyfin to tally the performance of U.S.-listed shipping stocks over the past year.
The winner, by a very large margin, is container-ship lessor Danaos Corp. (NYSE: DAC), founded by Greece’s John Coustas, up 1,022%. In trader parlance, it’s a “12-bagger.” To put that in perspective, the Dow Jones Industrial Average rose 43% over the same timeframe, the S&P 500 48% and the NASDAQ Composite 62%.
Container-ship lessor stocks
Container-ship lessor stocks have done particularly well. With box freight rates at record highs, liners are scrambling for more tonnage to increase exposure to the booming spot freight market.
The Freightos global index is now triple levels seen in the past two years (Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
Liners are willing to pay exceptionally high charter rates — now at mid-2000s era levels — because they can more than offset higher charter costs with freight income.
Looking at one-year stock price moves, champion Danaos is among five Greek-controlled owners that have all handily beat the stock-market averages. The runner-ups: Aristidis Pittas’ Euroseas (NASDAQ: ESEA) rose 481% year on year; Angeliki Frangou’s Navios Partners (NYSE: NMM), which recently acquired sister company Navios Containers, 356%; George Giouroukos-led Global Ship Lease (NYSE: GSL) 191%; and Konstantakopoulos family-sponsored Costamare (NYSE: CMRE) 93%.
Container liner stocks
Most liner stocks are listed in Europe and Asia, not the U.S. Until recently, the only exceptions were Hawaii-based Matson (NYSE: MATX) — which has traditionally focused on domestic trades, but over the past year, has heavily expanded in the China-U.S. trans-Pacific market — and the American Depositary Receipts (ADRs) of Denmark-listed industry giant Maersk (OTC: AMKBY).
These were recently joined by Israel-based ZIM (NYSE: ZIM), which IPO’d in late January. ZIM has been the star performer, up 226% since its listing. Maersk’s U.S.-trade ADRs are up 146% and Matson is up 103% year on year.
Dry bulk stocks
Like container stocks, dry bulk stocks bottomed around a year ago. Unlike container stocks, their gains have been more back-loaded, with dry bulk stock making most of their moves in 2021.
All of the top U.S.-listed dry bulk stocks have easily beaten the broader year-on-year market gains — and their performance is rapidly catching up with container-lessor stocks. The best dry bulk performer is not an owner, but rather, the Breakwave Dry Bulk Shipping Exchange Traded Fund (NYSE: BDRY), up 335% year-on-year. The BDRY ETF buys dry bulk freight futures.
Among shipowners, Eagle Bulk (NASDAQ: EGLE) is up 264% year on year, Grindrod (NASDAQ: GRIN) 236%, Safe Bulkers (NYSE: SB) 232%, Star Bulk (NASDAQ: SBLK) 230%, EuroDry (NASDAQ: EDRY) 206%, Genco Shipping & Trading (NYSE: GNK) 163% and Golden Ocean (NASDAQ: GOGL) 140%.
And the loser is … tanker stocks
Tanker stocks had long been the traditional heavy hitters of shipping equities due to their comparatively higher market caps and investments by energy funds. Alas, in the COVID era stock market, tankers have been left in the dust.
Tankers saw a heavy buildup of floating storage between late April and early July 2020, fueling rampant exuberance in the first half of last year. However, floating storage effectively pulled future transport demand forward by prepositioning petroleum volumes just offshore of buyer nations. As a result of that, as well continued low demand versus the pre-COVID era, tanker rates have languished well below breakeven for an extended period.
Tanker stocks recovered some lost ground in 2021, but are still by far the worst shipping-stock investment of the COVID period, dramatically underperforming other shipping equities as well as the broader stock market.
Looking at the one-year stock performance, Frontline (NYSE: FRO) and Scorpio Tankers (NYSE: STNG) have been the least-bad performers, down 18%. They’re trailed by DHT (NYSE: DHT) down 19%, Euronav (NYSE: EURN), down 21%, International Seaways (NYSE: INSW) — which is in the middle of a merger with Diamond S Shipping (NYSE: DSSI) — down 28%, and Teekay Tankers (NYSE: TNK) down 32%.
The worst tanker performer is the stock that was the most popular among retailer traders during the floating storage boom and a darling of CNBC’s Jim Carmer: Herbjorn Hanssen-led Nordic American Tanker (NYSE: NAT) — now down 47% year on year.
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