Dry Bulk Stocks Down, Optimism Up

• By the tickerspy.com Staff
• On 10:18 am EDT, Friday October 2, 2009

Deutsche Bank initiated coverage on more than 30 transportation stocks on Wednesday afternoon, and after Thursday's selloff, the "Buys" have gotten even more attractive.

Yesterday, investors sent the Dow down by triple digits on poor economic data, and after today's weaker-than-expected jobs number, it appears the market might retreat for its seventh session in the last nine. While it can be tough to fight momentum in this market, many stocks are now even further from their price targets, representing more attractive valuations.

On Wednesday, Deutsche Bank Securities initiated coverage on a diverse basket of transportation stocks, including some components of the Dry Bulk Shipping Stocks Index. Meanwhile, if Cosco researcher Kong Fanhua's BDI 4000 call is accurate, the upside could be large for shipping stocks.

Diana Shipping (NYSE: DSX - News), the sector's top performer over the last week, received a "Buy" rating from the analyst. His $20 price target represents a 55% premium to Thursday's closing value of less than $13. Deutsche Bank cited Diana's balance sheet and focus on medium- to long-term charters for its optimism, according to StreetInsider.com.

Navios Partners (NYSE: NMM - News) also got a "Buy" rating at Deutsche Bank, and a less optimistic $15 price target, which represents a 26% premium to Thursday's close.

Genco Shipping & Trading (NYSE: GNK - News) and Euroseas (NASDAQ: ESEA - News) were both rated "Hold," but the analyst's price target implies bullish sentiment. Both would have to run by over 15% before hitting their targets.

The analyst was bearish on Eagle Bulk Shipping (NASDAQ: EGLE - News), giving the stock a "Sell" rating and a $3 price target. Eagle is down another -2% today after sliding with the market in yesterday's session.

Elsewhere in the dry bulk sector, DryShips (NASDAQ: DRYS - News) announced yesterday that it has reached an agreement with financer Nord LB on waiver terms for $116 million of debt. Meanwhile, OceanFreight (NASDAQ: OCNF - News) is ramping up for a rebound with the acquisition of a 2005 built Capesize carrier for $49.5 million.

As of this writing, the Dry Bulk Shipping Stocks Index is one of the 30 worst-performing tickerspy Indexes over the last month, down by -1%.

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