OceanPal Inc. (OP) in Athens, Greece, provides ocean-going transportation services worldwide. The company spun off from its parent company Diana Shipping Inc. (DSX), on Nov. 29, 2021. Since the beginning of the year, OP has been losing momentum owing to the omicron scare, which has been aggravated by worsening supply chain disruptions, rising inflation, and geopolitical tensions. OP stock has slumped 65.6% in price year-to-date and 85.8% over the past year.
However, the global shipping industry is expected to grow rapidly in the coming months, driven by sustained demand, persistent supply chain disruptions, rapid digitization, and automation in shipping and logistics services. Shipping prices are soaring due to the Russia-Ukraine war , which should boost the profit margins of fundamentally sound shipping companies.
Given this backdrop, we think it could be profitable to add quality shipping stocks A.P. Møller - Mærsk A/S (AMKBY), ZIM Integrated Shipping Services Ltd. (ZIM), Matson, Inc. (MATX), and Triton International Limited (TRTN) to one’s portfolio.
A.P. Møller - Mærsk A/S (AMKBY)
AMKBY is an integrated transport and logistics company. It is headquartered in Copenhagen, Denmark. The company operates in four segments: Ocean; Logistics & Services; Terminals & Towage; and Manufacturing & Others. AMKBY offers terminal handling, container and transshipment services, sea and air freight forwarding, supply chain management, cold chain logistics, and custom services.
Last December, AMKBY acquired LF Logistics Holding Limited, a leading omnichannel fulfillment contract logistics company in the Asia Pacific. With the acquisition, AMKBY might expand its contract logistic capabilities and boost its revenue streams.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, AMKBY's revenue increased 64.4% year-over-year to $18.51 billion. The company's EBITDA grew 194.7% year-over-year to $7.99 billion. AMKBY’s profit before tax rose 375.9% year-over-year to $6.29 billion. The company's profit for the period increased 369.6% from the prior-year period to $6.11 billion. And AMKBY's EPS from continuing operations grew 389.4% year-over-year to $323.
Analysts expect AMKBY's revenue for its fiscal year 2022 first quarter, ending March 31, 2022, to come in at $18.82 billion, representing a 51.3% rise year-over-year.
The stock’s price has improved 39.3% over the past year. AMKBY closed Friday's trading session at $15.76.
AMKBY's POWR Ratings reflect this promising outlook. The stock has an overall A rating, which translates to Strong Buy in our proprietary system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
AMKBY has a grade of A for Growth and Momentum. It has a B grade for Value and Quality. Within the B-rated Shipping industry, it is ranked #1 of 48 stocks.
To see additional POWR Ratings (Stability and Sentiment) for AMKBY, click here.
ZIM Integrated Shipping Services Ltd. (ZIM)
ZIM offers container shipping and related services in Israel and internationally. The company is headquartered in Haifa, Israel. It provides seaborne transportation and logistics services, inland transport services, and cargo tracking services. ZIM operates a fleet of more than 110 container vessels and eight vehicle transport vessels.
On February 10, ZIM announced a new charter agreement with Navios Maritime Partners L.P. ZIM agreed to charter 13 container vessels, including five secondhand vessels and eight newly built vessels. This agreement is expected to enhance ZIM’s position as a global-niche operator, extend customer base and boost profitability.
ZIM's total revenues increased 155.1% year-over-year to $3.47 billion in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. Its operating income improved 382.9% year-over-year to $2.12 billion. ZIM's adjusted EBITDA increased 344.4% year-over-year to $2.36 billion. And the company's net income grew 367.2% year-over-year to $1.71 billion. Its earnings per share rose 306% year-over-year to $14.17.
The $3.49 billion consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022. represents 115.8% year-over-year growth from the same period in 2021. The $12.56 consensus EPS estimate for the current quarter represents a 142.9% year-over-year rise from the prior-year period. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.
Shares of ZIM have gained 33.9% in price year-to-date and 212.1% over the past year. ZIM closed Friday's trading session at $78.81.
ZIM's POWR Ratings reflect this strong outlook. The stock has an overall B rating, which translates to Buy in our POWR Ratings system.
It has an A grade for Momentum and a B grade for Growth, Value, and Quality. It is ranked #7 of 48 stocks in the Shipping industry.
Click here to see ZIM POWR Ratings for Sentiment and Stability.
Matson, Inc. (MATX)
MATX provides ocean transportation and logistics services worldwide. It is headquartered in Honolulu, Hawaii. The company operates in two segments: Ocean Transportation; and Logistics. It provides freight transportation services, vessel management and container transshipment services, and multimodal transportation brokerage services. The company serves the U.S. military, freight forwarders, retailers, automobile manufacturers, and other customers.
In January, MATX announced the addition of three million shares to its existing share repurchase program. “We will be both disciplined and opportunistic in our capital allocation, and we remain committed to return excess cash to shareholders as a means to create additional shareholder value over the long-term,” stated Matt Cox, Matson’s Chairman, and Chief Executive Officer.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, MATX's total operating revenue increased 81% year-over-year to $1.27 billion. MATX's operating income grew 304% year-over-year to $475.50 million. Its income before income taxes grew 313% year-over-year to $472.50 million. Its net income rose 360.9% from its year-ago value to $394.50 million. The company's earnings per share increased 379.1% from the year-ago value to $9.39.
Analysts expect MATX's revenue for its fiscal year 2022 first quarter, ending March 2022 to come in at $1.12 billion, representing a 69.6% rise year-over-year. The Street expects the company's EPS for the current quarter to come in at $7.07, representing a 255.3% increase year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.
MATX gained 20.3% in price year-to-date and 40.7% over the past year and closed Friday's trading session at $108.29.
MATX's strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system.
It has a grade of A for Growth and Momentum. It has a grade of B for Value and Quality. Within the B-rated Shipping industry, it is ranked #2 of 48 stocks.
To see additional POWR Ratings (Stability and Sentiment) for MATX, click here.
Triton International Limited (TRTN)
TRTN is engaged in the acquisition, leasing, and sale of intermodal containers and chassis to shipping lines and freight forwarding companies. TRTN is headquartered in Hamilton, Bermuda. The company operates in two segments: Equipment Leasing and Equipment Trading. It operates in Asia, Europe, the Americas, Bermuda, and internationally. In January, TRTN priced a public offering of $600 million of senior notes due 2032. The net proceeds from the note offering are expected to be used to repay borrowings under the company’s credit facility.
TRTN's total leasing revenues increased 23.7% year-over-year to $417.16 million in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. Its operating income improved 34.7% year-over-year to $256.34 million. The company's adjusted net income grew 54.8% year-over-year to $177.50 million. And TRTN’s adjusted net income per share rose 57.1% year-over-year to $2.67.
The $420.13 million consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents 19.7% year-over-year growth from the same period in 2021. The $2.63 consensus EPS estimate for the current quarter represents a 37.7% year-over-year rise from the year-ago period. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
TRTN stock gained 7.7% in price over the past year and closed Friday's trading session at $64.84.
The stock has an overall B rating, which translates to Buy in our POWR Ratings system. TRTN has an A grade for Sentiment and a B for Quality. It is ranked #11 of 48 stocks in the B-rated Shipping industry.
Click here to see TRTN’s POWR Ratings for Momentum, Growth, Value, and Stability.
AMKBY shares were trading at $16.96 per share on Monday afternoon, up $1.20 (+7.64%). Year-to-date, AMKBY has declined -5.37%, versus a -12.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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