| | | About shipping stocks: I've tried to invest in several, and it's turned out I'm more speculator than ever with this sector. There are just so many aspects to these businesses.
I would say that I've been involved in the past couple of years in two waves: The first wave with Covid that increased demand for various products. Especially I noticed container stocks and container shipping stocks. Now the current wave in oil tankers exacerbated with Red Sea shipping attacks.
If we talk oil tankers we have crude carriers and refined oil product tankers. There's also OSV's which provide logistical service off shore to rigs, etc.
Some shipping companies specialize or emphasize very large ships, some smaller ships.
Some of the larger shipping companies have bulk ships (coal, etc.) and/or container ships as well as oil ships.
The commodities have fluctuating demand where sometimes, bulk is more wanted/profitable than oil for example.
So the multifaceted shippers would tend to have more level earnings.
If the Suez Canal is low water now, then some of these companies trying to ship through there will be affected by that.
Some companies like the steady income of having longer-term contracts with customers. Other shipping companies emphasize the spot market, which, when demand is strong in the cycle, are more profitable than ships tied to long-term contracts.
Some of these companies are controlled/owned by management who often seem to be at odds with smaller investors.
And within a subsector (say crude carriers), there are some who are more willing to take on debt to increase the number of modern ships they have. Other carriers play more cautiously, sometimes trading old ships to acquire newer ones.
I conclude that in the several years I've been in the sector, I've learned a lot, but far from enough. Overall, with all my machinations buying and selling within and among shipping subsector, I'm not sure I've ended up profitably so far. I currently have a few shares in product tanker stocks such as OSV, INSW, TRMD, STNG. DAC (container ships) is my largest position in shipping stocks. I like the low p/book value here, which might be an inappropriate metric to be dependent on if/when business tanks (pun? sorry -g-)
If I were to give cautions, I'd say this is sector where being right in the cycle counts. Shipping stocks are a difficult sector with several subsectors. To be avoided. Run. And if I had any sense, I likely should take my own cautions. Some of these stocks are near highs. I have trouble selling. Laziness? They're still cheap? FOMO? |
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