In this article, we discuss the 10 best shipping and container stocks to buy.
According to a recent World Trade Organization estimate, global merchandise trade volume is expected to grow by 10.8% in 2021, followed by a 4.7% increase in 2022, which bodes well for the shipping industry. Some of the shipping and container stocks that are benefiting from the strong demand in the market are Danaos Corporation (NYSE:DAC), A.P. Møller – Mærsk A/S (OTC:AMKBY), Costamare Inc. (NYSE:CMRE), and ZIM Integrated Shipping Services Ltd. (NYSE:ZIM).
In recent quarters, global shipping companies have seen a massive improvement in volume and revenue due to surges in worldwide trade. The continuous boom of the e-commerce business is an important catalyst that keeps the shipping industry sailing higher. Global trade volumes grew 4% in Q2, returning to near pre-COVID levels of trend growth, according to a Q2 shipping market analysis.
Aside from increased demand for ships and containers, analysts are bullish on shipping stocks as they anticipate a rise in ship value due to limited vessel supply globally. Shipping stock prices are likely to climb, according to research firm TS Lombard, as the value of vessels rises, increasing the net asset value of shipping companies.
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Our Methodology
We picked some of the most notable shipping and container stocks with long-term growth potential. These stocks are popular among the elite hedge funds tracked by Insider Monkey, and also have positive ratings among major analyst firms.
The hedge sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Shipping and Container Stocks To Buy
10. A.P. Møller – Mærsk A/S (OTC:AMKBY)
Number of Hedge Fund Holders: N/A
A.P. Møller – Mærsk A/S (OTC:AMKBY) is a Denmark-based container logistics company that ranks tenth in our list of best shipping and container stocks to buy. The company offers international container shipping services in over 130 countries. The Danish shipping company had a strong year so far, with A.P. Møller – Mærsk A/S (OTC:AMKBY) shares rising 31%, year to date.
On October 28, Morgan Stanley analyst Carolina Dores kept an Overweight rating on A.P. Møller – Mærsk A/S (OTC:AMKBY) and raised her price target for the stock to DKK 23,300 from DKK 19,500.
9. Hapag-Lloyd Aktiengesellschaft (OTC:HPGLY)
Number of Hedge Fund Holders: N/A
Hapag-Lloyd Aktiengesellschaft (OTC:HPGLY) is one of the world’s leading shipping companies that operates 250 modern ships and it ranks ninth in our list of 10 best shipping and container stocks to buy. Hapag-Lloyd Aktiengesellschaft (OTC:HPGLY) offers sea transportation of everything from foodstuff to beverages, chemicals and plastics, automobiles, electronics, and pharmaceuticals. The German shipping company offers a variety of cargo containers such as dry, reefer, and special cargo containers.
Shares of Hapag-Lloyd Aktiengesellschaft (OTC:HPGLY) climbed 211% in the past year. In the second quarter of 2021, the company’s revenue came in at approximately $5.42 billion, an increase of 57% year over year.
8. Euroseas Ltd. (NASDAQ:ESEA)
Number of Hedge Fund Holders: 5
Euroseas Ltd. (NASDAQ:ESEA) operates a fleet of 15 vessels that transport dry and refrigerated containerized cargoes and it ranks eighth on the list of 10 best shipping and container stocks to buy. Shares of Euroseas Ltd. (NASDAQ:ESEA) climbed 474%, year to date.
Euroseas Ltd. (NASDAQ:ESEA) purchased the M/V Piraeus Trader, a 1,740 TEU container feeder, from UK-based Lomar Shipping in September for $25.5 million and signed a three-year time charter contract for roughly $26,700 per day net to the firm. Following the acquisition, Maxim analyst Tate Sullivan maintained a Buy rating on Euroseas Ltd. (NASDAQ:ESEA) on September 9. Sullivan raised his price target for the stock to $42 from $38.
Hedge funds are also becoming bullish on the Greek containership stock. Of the 873 elite funds tracked by Insider Monkey, 5 were long Euroseas Ltd. (NASDAQ:ESEA) at the end of June, up from 1 in the first quarter of 2021. As of the second quarter, Renaissance Technologies is the leading stakeholder of the company with 127,242 shares worth $2.93 million.
7. Seanergy Maritime Holdings Corp. (NASDAQ:SHIP)
Number of Hedge Fund Holders: 6
Ranking seventh in our list of 10 best shipping and container stocks to buy is Athens-based international shipping company Seanergy Maritime Holdings Corp. (NASDAQ:SHIP). In October, the shipping stock was upgraded to Buy from Hold by Maxim analyst Tate Sullivan. The analyst sees a significant improvement in the company’s balance sheet and believes that Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) is well-positioned to capitalize on the increasing demand for dry bulk ship vessels. Sullivan set a price target of $2.50 for SHIP.
Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) operates a fleet of 17 vessels carrying approximately 14.2 million tons of iron ore and coal cargo in 202-2021. Meanwhile, after reaching a definitive agreement with an unaffiliated third party to acquire a Capesize vessel, to be renamed M/V Dukeship, for $34.3 million, Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) shares climbed 2.29% pre-market on October 19.
London-based hedge fund Marshall Wace LLP is the biggest stakeholder of the company as of the second quarter, with a $2.59 million stake. Overall, 6 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in the Athens-based company at the end of June 2021.
6. Matson, Inc. (NYSE:MATX)
Number of Hedge Fund Holders: 14
Matson, Inc. (NYSE:MATX) is a Hawaii-based shipping and logistics company that ranks sixth on the list of 10 best shipping and container stocks to buy. With over 130 years of experience in ocean transport, Matson, Inc. (NYSE:MATX) is one of the most reliable shipping companies that services Alaska, Micronesia, Guam, and the South Pacific.
Even though Matson, Inc. (NYSE:MATX) saw a decline in the number of hedge funds having stakes in the company in the second quarter, the stock remains a popular container and ship stock play among institutional investors. At the end of June, 14 funds out of the 873 tracked by Insider Monkey had stakes in the company, compared to 19 in the previous quarter.
On October 12, Benjamin Nolan of Stifel kept a Buy rating on Matson, Inc. (NYSE:MATX) and increased his price target for the stock to $92 from $80.
Matson, Inc. (NYSE:MATX) also offers a 1.44% dividend yield.
5. Costamare Inc. (NYSE:CMRE)
Number of Hedge Fund Holders: 17
Costamare Inc. (NYSE:CMRE) is one of the biggest shipping companies in the world with a fleet of 78 containerships and 37 dry bulk vessels. The Monaco-based international containership company ranks fifth on the list of 10 best shipping and container stocks to buy.
More hedge funds backed Costamare Inc. (NYSE:CMRE) in the second quarter of 2021. With a $28.2 million stake in Costamare Inc. (NYSE:CMRE), Renaissance Technologies owns 2.39 million shares of the company as of the end of the June quarter. Of the 873 elite funds tracked by Insider Monkey, 17 were long Costamare Inc. (NYSE:CMRE) at the end of the second quarter up from 12 in the first quarter of 2021.
On September 8, Citi analyst Christian Wetherbee kept a Buy rating on Costamare Inc. (NYSE:CMRE) following Q2 earnings. Wetherbee raised his price target for the stock to $19 from $14.50.
4. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 18
Global Ship Lease, Inc. (NYSE:GSL) operates a fleet of 65 containerships. The London-based company leases mid-size Post-Panamax and smaller containerships to container shipping companies. With the continued global demand for containerized ships, shares of Global Ship Lease, Inc. (NYSE:GSL) soared 96%, year to date.
The company, which ranks fourth on the list of 10 best shipping and container stock to buy, offers an attractive dividend yield of 4.30% to its shareholders. As of the end of the second quarter, 18 hedge funds tracked by Insider Monkey reported owning stakes in Global Ship Lease, Inc. (NYSE:GSL). The total worth of these stakes is $97 million. This shows the hedge fund sentiment is positive for the ship-leasing company as 11 funds had stakes in the company in the previous quarter, having a total worth of $48 million.
3. Danaos Corporation (NYSE:DAC)
Number of Hedge Fund Holders: 18
With a dividend yield of 2.70%, Danaos Corporation (NYSE:DAC) ranks fourth on the best shipping and container stocks to buy. The company pays its shareholders an annual dividend of $1 per share.
The Greek shipping company boasts a fleet of 71 container vessels ranging from 2,200 TEU to 13,100 TEU. In the second quarter of 2021, Danaos Corporation (NYSE:DAC) announced a 25.3% increase in operating revenues totaling $146.6 million. Shares of Danaos Corporation (NYSE:DAC) soared 777% in the past twelve months and increased 248%, year to date.
At the end of the second quarter of 2021, 18 hedge funds held stakes in Danaos Corporation (NYSE:DAC) worth $163 million. This is compared to 12 hedge funds in the previous quarter, with stakes worth $122 million.
2. Genco Shipping & Trading Limited (NYSE:GNK)
Number of Hedge Fund Holders: 19
The New York-based shipping company primarily operates dry bulk vessels used to transport grains, coal, iron ore, and steel. Overall, 19 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in the company at the end of June 2021, down from 22.
On September 13, H.C. Wainwright analyst Magnus Fyhr initiated a Buy rating on Genco Shipping & Trading Limited (NYSE:GNK). The analyst sees good vessel profitability in the coming year backed by moderate demand growth in the dry bulk market. The analyst set a $30 price target for the shipping stock. The stock gained 161% in the past twelve months.
Genco Shipping & Trading Limited (NYSE:GNK) established a new joint venture with Singapore-based The Synergy Group in August. The joint venture, GS Shipmanagement Pte. Ltd., will operate eight of its vessel fleet alongside Synergy’s container ships, tankers, dry bulk vessels, and LNG vessels, which will be launched in the third quarter.
1. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 25
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is an Israeli shipping company that offers cargo transportation services. The company also provides digital services such as cargo tracking services, shipment booking, and a mobile shipment management app.
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) has prospered in recent months as a result of significant increases in container shipping rates and carried volume. The stock gained 28% in the past three months. The company’s revenue in the second quarter came in at $2.38 billion, representing a 200% year-over-year growth. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) tops the list of 10 best shipping and container stocks to buy.
Samuel Bland of JPMorgan on October 5 gave an Underweight rating on ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) with a $46.02 price target. On the other hand, hedge funds are looking more positive about the shipping stock. Of the 873 elite funds tracked by Insider Monkey, 25 were long ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) at the end of June, up from 14 in the first quarter of 2021.
New York-based investment management firm King Street Capital is the leading stakeholder of the company with 1.23 million shares worth $55 million.
In the Q2 2021 investor letter of Evermore Global Advisors, the fund mentioned ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) and discussed its stance on the firm. Here is what the fund said:
“ZIM Integrated Shipping Services (ZIM) was the largest contributor to the Fund’s performance during the second quarter. With a market cap of $5.2 billion, ZIM is an Israel-based containership operator that had its initial public offering on the New York Stock Exchange this past January. As a reminder, we discussed ZIM at length in the Q1 2021 quarterly commentary as one of the new investments that we initiated during that period.
There were several notable developments during the second quarter. Given the company’s unique asset light business model and targeted, global niche approach, ZIM continued to generate exceptionally strong cash flows. ZIM ended the period with approximately $1.25 billion in cash and about $915 million in net debt. Due to the strong operational performance, the company further strengthened its balance sheet by redeeming its Series 1 and Series 2 unsecured notes due in 2023. With the early redemption of the unsecured notes, ZIM was no longer subject to certain dividend restrictions, and it declared a special dividend of $2 per share, which will be payable on Sept 15th (goes ex on August 24th). Lastly, management revised its 2021 fullyear EBITDA guidance from $1.4 – 1.6 billion to $2.5 – $2.7 billion, which was a sizeable increase compared to the levels set last March. To that end, we continue to have high conviction in our position in ZIM.”
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Disclosure: None. 10 Best Shipping and Container Stocks To Buy is originally published on Insider Monkey.
