Why dry bulk shipping sees continued favorable trends (Part 2 of 14)
Dry bulk shipping companies continue to outperform the overall market S&P 500 ETF (SPY) and the Guggenheim Shipping ETF (SEA), which seeks to invest in multiple large shipping companies around the world.
The chart above shows that over the past year, an equal investment in the five largest publicly traded dry bulk shipping companies—DryShips Inc. (DRYS), Navios Maritime Partners LP (NMM), Navios Maritime Holdings Inc. (NM), Diana Shipping Inc. (DSX), and Safe Bulkers Inc. (SB) would have rewarded investors a 90% return. This is almost triple the amount of return the overall market saw.
Note that a large portion of the gain occurred between August and September, when rates really took off and caught the market off-guard. Plus, returns have also been more volatile compared to the overall S&P 500 (SPY) and the Guggenheim Shipping ETF (SEA), so the industry may not be everyone’s cup of tea. However, diversification can help reduce this volatility, and it may be something investors should consider.
Will it rise or fall?
Determining whether a stock will rise or fall is the first step to investing. To do that, investors must know some of the key drivers or indicators that investors or managers look at. These will help them get a better understanding of where the industry is headed over the next few months and quarters. The following articles are just some of the latest information released, and you can find more at MarketRealist.com.
Browse this series on Market Realist:
- Part 1 - Morgan Stanley upgrades dry bulk and VLCC, SBLK, SB, DSX rally 10%
- Part 3 - Why shipping managers place orders when they see a brighter future
- Part 4 - Dry bulk shippers scrap fewer vessels due to improved fundamentals
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