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Bear of the Day: Diana Shipping (DSX)

David Bartosiak

When news of Phase One of the US-China trade deal hit the wires, investors rejoiced. Rightfully so, as it was the largest black cloud hanging over the stock market. Global growth was severely threatened as two giant economies fought eat other. Now, a new event is putting a strain on markets, the coronavirus. Threatening trade again, the virus is putting a damper on all things Chinese. One sensitive industry is global shipping. Today’s Bear of the Day is a stock in that industry, Diana Shipping (DSX).

Diana Shipping Inc. provides shipping transportation services. The company transports a range of dry bulk cargoes, including commodities, such as iron ore, coal, grain, and other materials in shipping routes through its ownership of dry bulk vessels worldwide. As of September 5, 2019, it operated a fleet of 43 dry bulk vessels comprising 4 Newcastlemax, 14 Capesize, 5 Post-Panamax, 5 Kamsarmax, and 15 Panamax vessels. 

Diana Shipping is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is the series of earnings estimate revisions coming in to the downside. Over the last sixty days, analysts have cut their estimates for the current year and next year. That bearish sentiment has dropped the Zacks Consensus Estimate for the current year from 13 cents to 10 cents while next year’s number is off from 25 cents to 3 cents. That’s a significant move to the downside, taking what should have been year-over-year earnings growth of nearly 100% and knocking it down to an earnings contraction of 70%. A dramatic swing for such a short period of time.

Diana Shipping inc. Price and Consensus

Diana Shipping inc. Price and Consensus

Diana Shipping inc. price-consensus-chart | Diana Shipping inc. Quote

The Transportation - Shipping industry ranks in the Top 25% of our Zacks Industry Rank. Investors looking for other names within this industry have several Zacks Rank #1 (Strong Buy) stocks they can investigate further. Among these are Zacks Rank #1 (Strong Buy) DHT Holdings (DHT) and Euronav (EURN).

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