13 Best Shipping and Container Stocks To Buy
In this article, we will take a look at the 13 best shipping and container stocks to buy. To skip our recent market trends and activity analysis, you can go directly to see the 5 Best Shipping and Container Stocks to Buy.
The usually inconspicuous realm of shipping stocks gained prominence during the COVID-19 pandemic, offering investors a firsthand view of the critical role marine shipping plays in the global economy. The pandemic disrupted regular supply chains, leaving numerous deep-sea cargo ships and containers in unfavorable positions to cope with a substantial surge in demand. Consumers, confined to their homes and unable to spend on experiences, redirected their focus to purchasing goods. Following a surge in container shipping post-pandemic, economic and geopolitical uncertainties, coupled with diminishing demand, have adversely affected freight rates. In April 2023, the cost of shipping a container between Asia and the US or Europe was over 80% lower compared to the previous year, although some routes have now stabilized at pre-pandemic levels.
Approximately 90% of globally traded goods rely on maritime transportation, and the volume of maritime trade is projected to triple by 2050 due to rising demand. However, this growth occurs amid escalating risks to shipping from tropical storms, inland flooding, sea-level rise, drought, and extreme heat. According to a study conducted by RTI and reviewed by the Environmental Defense Fund, the impacts of climate change on ports, encompassing damage and disruption, could incur annual costs of up to $10 billion for the shipping industry by 2050 and up to $25 billion per year by 2100.
Nonetheless, the global cargo shipping market, valued at $2.2 trillion in 2021 as per a research report, is poised for substantial growth in the forthcoming years. Projections indicate that it will attain a market size of $4.2 trillion by 2031, showcasing a compound annual growth rate (CAGR) of 7% from 2022 to 2031. This underscores a positive trajectory and underscores the industry's expansive dynamics.
Moreover, the surge in e-commerce is propelling the need for swifter and more cost-efficient shipping solutions, with the global e-commerce logistics market anticipated to witness a CAGR of over 13% from 2020 to 2027. Concurrently, the adoption of digitalization and automation is gaining momentum, with the global smart logistics market set to reach $46.5 billion by 2025, according to Business Wire. These trends offer both opportunities and challenges for major shipping companies globally, underscoring the significance of innovation, adaptability, and strategic alliances to maintain a competitive edge.
While the shipping industry confronts short-term challenges, its long-term prospects remain promising, considering that 90% of global freight relies on ocean transportation. Notable shipping stocks and container stocks worth considering for investment include Kirby Corporation (NYSE:KEX), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and Global Ship Lease, Inc. (NYSE:GSL).
Photo by Ammiel Jr on Unsplash
Our Methodology
For our list of the best shipping and container stocks, we picked to following names based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the second quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
13. Diana Shipping Inc. (NYSE:DSX)
Number of Hedge Fund Holders: 7
Diana Shipping Inc. (NYSE:DSX) functions as a holding company, specializing in shipping transportation services through the ownership and operation of dry bulk vessels. The company's fleet is primarily engaged in medium to long-term time charters, transporting a variety of dry bulk cargoes such as iron ore, coal, grain, and other materials across global shipping routes. Established on March 8, 1999, Diana Shipping, Inc. is headquartered in Athens, Greece.
On November 20, Diana Shipping Inc. (NYSE:DSX) announced that, through a separate wholly-owned subsidiary, it has secured a time charter contract with Bunge SA, Geneva, for one of its Ultramax dry bulk vessels, the m/v "DSI Andromeda". The gross charter rate is set at US$13,500 per day, with a 5% commission paid to third parties, covering a period until at least February 20, 2025, and extending up to April 20, 2025 at the latest. The employment of the "DSI Andromeda" is expected to generate approximately $6.03 million in gross revenue for the minimum scheduled period of the time charter.
As of Q3 2023, 7 of the 895 hedge funds tracked by Insider Monkey held shares of Diana Shipping Inc. (NYSE:DSX), worth $18.7 million. Jeremy Hosking’s Hosking Partners is its largest hedge fund shareholder with ownership of 5.01 million shares valued at $17.4 million.
Like Kirby Corporation (NYSE:KEX), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and Global Ship Lease, Inc. (NYSE:GSL), Diana Shipping Inc. (NYSE:DSX) is one of the best shipping and container stocks to look out for.
12. Eagle Bulk Shipping Inc. (NYSE:EGLE)
Number of Hedge Fund Holders: 9
Eagle Bulk Shipping Inc. (NYSE:EGLE) is a holding company involved in the global ocean transportation of diverse dry bulk cargoes. The company manages, charters, and operates dry bulk vessels, specifically Supramax and Handymax vessels. These vessels are utilized for the transportation of various minor and major bulk cargoes, such as iron ore, coal, grain, cement, and fertilizer, on a worldwide scale.
As of Q3 2022, 9 hedge funds tracked by Insider Monkey owned shares of Eagle Bulk Shipping Inc. (NASDAQ:EGLE), valued at $16.25 million. Its largest shareholder was Israel Englander's Millennium Management with ownership of 95,924 million shares valued at $4.03 million.
11. Danaos Corporation (NYSE:DAC)
Number of Hedge Fund Holders: 10
Danaos Corporation (NYSE:DAC) is involved in providing marine and seaborne transportation services, focusing on operating vessels within the containership sector of the shipping industry. Founded by Dimitris Coustas in 1972, the company is headquartered in Piraeus, Greece.
In the third quarter, Danaos Corporation (NYSE:DAC) achieved robust financial performance, reporting a net profit of $143 million from a turnover of $239 million. Unlike its ocean carrier clients, Danaos foresees a profitable short- and mid-term outlook, supported by its collection of unexpired long-term charters. Throughout Q3, Danaos chartered its fleet of 68 container vessels, ranging from 2,100 teu to 13,100 teu, to liner shipping companies like CMA CGM, MSC, Maersk, and Yang Ming.
Danaos Corporation (NYSE:DAC) shares were held by 10 of the 910 hedge funds as of Q3 2023, with the total hedge fund holdings valued at $55.65 million. Its largest hedge fund shareholder is Dmitry Balyasny’s Balyasny Asset Management.
10. Costamare Inc. (NYSE:CMRE)
Number of Hedge Fund Holders: 10
Costamare Inc. (NYSE:CMRE) is a global leader in container ship ownership and charter services, operating as a Greek and Marshall Islands corporation. In a strategic move earlier this year, Costamare Inc. (NYSE:CMRE) made a substantial investment of $200 million in Neptune Maritime Leasing Limited, solidifying its position as the primary investor in this forward-looking maritime leasing platform.
Costamare Inc. (NYSE:CMRE) was a part of 10 investors’ portfolios at the close of Q3 2023. The total stakes of these hedge funds amounted to $9.89 million. As of September 30, Israel Englander's Millennium Management is the leading shareholder in the company.
9. Golden Ocean Group Limited (NASDAQ:GOGL)
Number of Hedge Fund Holders: 11
Golden Ocean Group Ltd. (NASDAQ:GOGL) is involved in the ownership and operation of dry bulk vessels, managing a fleet that includes Newcastlemax, Capesize, Panamax, and Ultramax vessels for the transportation of bulk commodities such as ores, coal, grains, and fertilizers. Additionally, the company is active in chartering, purchasing, and selling vessels. Founded on September 18, 1996, and headquartered in Hamilton, Bermuda, Golden Ocean Group Ltd. has strategically entered agreements for the acquisition and sale of vessels, resulting in gains and reinforcing its market position with a focus on larger, fuel-efficient vessels to capitalize on market strength and generate substantial cashflow.
According to Insider Monkey’s third quarter database, 11 hedge funds held stakes worth $27.66 million in Golden Ocean Group Limited (NASDAQ:GOGL), compared to 12 funds in the prior quarter worth $22.5 million. Paul Marshall And Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 1.65 million shares worth $13 million.
8. Genco Shipping & Trading Limited (NYSE:GNK)
Number of Hedge Fund Holders: 14
Genco Shipping & Trading Limited (NYSE:GNK) is dedicated to the global ocean transportation of dry bulk cargoes. The company's fleet of dry bulk carrier vessels is chartered to various entities, including commodities traders and government-owned organizations.
Genco Shipping & Trading Limited (NYSE:GNK) declared its 17th consecutive quarterly dividend of $0.15 per share, demonstrating resilience in the face of challenges in the drybulk market. Additionally, the company announced the expansion of its fleet through the acquisition of the Genco Ranger, a high-specification Capesize vessel equipped with scrubbers, constructed in 2016. The strategic purchase, valued at $43.1 million, aligns with Genco's fleet renewal strategy, reinforcing its operations in the prevailing market conditions. The vessel is anticipated to be delivered in Q4 2023.
According to Insider Monkey’s third quarter database, 14 hedge funds were bullish on Genco Shipping & Trading Limited (NYSE:GNK), with combined stakes worth $24.38 million, compared to 11 funds in the prior quarter.
Appleseed Fund made the following comment about Genco Shipping & Trading Limited (NYSE:GNK) in its Q3 2023 investor letter:
“Appleseed Fund added three new names to the portfolio in the past three months: Dollar General (DG), Wesco International (WCC), and Genco Shipping & Trading Limited (NYSE:GNK). WCC and GNK are direct beneficiaries of rising inflation. An owner of drybulk ships, GNK’s stock price has been cut in one-half from its June 2022, despite its balance sheet improvement, an unwavering commitment to return excess free cash flow to shareholders, and an industry-low cash flow breakeven rate. Despite a constructive market backdrop with industry orderbooks at low levels and China’s expected recovery, the stock price only trades at roughly two-thirds of net asset value. With a fetching valuation, GNK and WCC’s future investment returns should be attractive to Appleseed investors in the years ahead.”
7. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 14
Global Ship Lease, Inc. (NYSE:GSL) is a company that owns containerships and offers high-specification, mid-size, and smaller vessels to liner shipping companies. These vessels are deployed under a balanced mix of both longer-term and short-term charters.
In the second quarter of 2023, Global Ship Lease, Inc. (NYSE:GSL) acquired four vessels with a total capacity of 8,544 teu at a combined cost of $123.3 million. During the first two quarters of 2023, the management secured 15 new charters, encompassing agreements for the recently acquired vessels. These new charters contributed $211.9 million in firm contracted revenues, enhancing GSL's forward charter cover.
According to Insider Monkey’s third quarter database, 14 hedge funds were bullish on Global Ship Lease, Inc. (NYSE:GSL), compared to 12 funds in the prior quarter. David Salanic’s Whitefort Capital is the biggest stakeholder of the company, with approximately 1.7 million shares worth $31.3 million.
6. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Number of Hedge Fund Holders: 14
Star Bulk Carriers Corp. (NASDAQ:SBLK) offers maritime transportation solutions specializing in the dry bulk sector. The company's fleet transports major bulks like iron ore, minerals, and grain, as well as minor bulks such as bauxite, fertilizers, and steel products.
In September, Star Bulk Carriers Corp. (NASDAQ:SBLK) announced a Repurchase Agreement with OCM XL Holdings, LP, a limited partnership incorporated in the Cayman Islands. According to the agreement, the company committed to buying back 10 million of its common shares at a price of $18.50 per share.
Insider Monkey dug through 910 hedge funds for their September quarter of 2023 portfolios and found 14 had bought Star Bulk Carriers Corp. (NASDAQ:SBLK)’s shares. Howard Marks’ Oaktree Capital Management was the firm’s largest investor out of these, as it owned $309.78 million worth of shares.
Star Bulk Carriers Corp. (NASDAQ:SBLK) joins the ranks of Kirby Corporation (NYSE:KEX), ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), and Global Ship Lease, Inc. (NYSE:GSL) as one of the best shipping and container stocks to buy.
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Disclosure: None. 13 Best Shipping and Container Stocks to Buy is originally published on Insider Monkey.
