In this article, we discuss the 5 best small-cap stocks to buy for 2022. If you want to read our detailed analysis of these stocks, go directly to 10 Best Small Cap Stocks To Buy for 2022.
5. Global Ship Lease, Inc. (NYSE:GSL)
Number of Hedge Fund Holders: 14
Global Ship Lease, Inc. (NYSE:GSL) is a London-based shipping company that leases containerships to companies at fixed rates. Since the supply chain crunch experienced by the globe during the pandemic, shipping stocks recorded surges in share price. As of February 8, Global Ship Lease, Inc. (NYSE:GSL) grew 106.01% in the last 12 months, and 12.88% in the last 3-month period. The company also offers a solid 3.69% dividend yield to shareholders as of February 8, 2022.
On November 11, B. Riley analyst Liam Burke raised the firm’s price target on Global Ship Lease, Inc. (NYSE:GSL) to $33 from $28 and maintained a ‘Buy’ rating on the shares, stating that the company’s cash flow from operating activities reported an increase for the first three quarters of 2021.
14 hedge funds were bullish on Global Ship Lease, Inc. (NYSE:GSL) stock at the close of the third quarter, holding positions worth roughly $100 million. This is in comparison to 18 hedge funds with bullish bets on the company stock a quarter earlier.
Investment firm Massif Capital talked about Global Ship Lease, Inc. (NYSE:GSL) in its Q4 2021 investor letter. Here’s what the fund said:
“We initiated a 6% position in GSL, bringing total maritime transit exposure up to ~9% of the portfolio when combined with our 3% SBLK position. GSL is a containership owner, leasing ships to container companies (such as a Maersk) at fixed rates. As owners, they own and manage the vessels (responsible for crews, maintenance, insurance) but do not have fuel costs. GSL focuses on mid-size to smaller containerships, which serve the faster-growing inter-regional trade routes that represent ~70% of global containerized trade volume.
As they own its containers, their business is both pro-cyclical (chartered tonnages used as growth platform by liner shipping companies) and counter-cyclical (with the sale and lease-back structures used by liner companies as a balance sheet management tool). GSL has a track record that includes both organic acquisitions and a strategic combination in Q4 2018 that doubled the size of the fleet.
We like GSL because they do not have as much operational leverage as a company like ZIM (which leases on both sides of the trade), and they sign 2–5-year contracts. Liners have been eager to secure that capacity for extended durations spanning multiple years, significantly longer than has been the case historically and well-aligned with GSL’s strategic preference to lock in value over time and provide forward visibility on cash flows…” (Click here to see the full text)
