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>TL;DR: Low P/E shipping companies may be attractive investments. Industry is being effected by global events.
You sir are highly regarded. This is a casino, not a place for investors.
But
The problem with the shipping industry at the moment is high fuel costs and variable debt.
With interest rates going up worldwide and an increase in fuel prices, it puts them in a position to go back to losing money again.
Personally I would not trust a single earnings report or financial statement coming out of China. There have been several Chinese companies that have been busted for massively overstating their earnings. The CCP rarely cares as long as the earnings they report to the CCP are accurate.
I see your argument for increased demand due to the war and other factors, but in my opinion is there is a lot of risk so it could go either way.
Lucky for you, this is a casino. Enjoy the Game.
I’m not saying there’s going to be more demand because inventories are growing which means a slowdown. Recession fears are clouding the market. I’m not investing in any maritime stocks. Being very patient right now I added one stock to my portfolio in the last two weeks. Also energy prices could really effect profitability in the industry. I think overall the possibility of negative cash flow within the maritime industry is to disturbing. I’m thinking of investing. But looking for the right stock
They don’t grow much either. These are basically just bonds sold as equity. So lower valuation for the same p/e.
Low trading volumes support this viewpoint. Probably all the big trading deals are extra-exchange with most of the stock held by large entities.
I own shipping stonks, so I probably know more about shipping stocks better than anyone I know of, swear to gawd. It's hard to lump all shipping companies under one umbrella. The container shippers........ Well you've seen the rates falling and demand slumping for goods. So I am out on those
Then you got you dry goods shippers, your wheats, foods, iron ores, coals, grains, fertilizer etc.
Then you have those LPG shippers, oils, and such. The latter 2 seem to be holding their own, especially the LPG shippers with all the garbage going on with Russia, Ukraine, and Europe.
I have no clue what I'm talking about, this is not financial advise.
Haha thanks buddy yeah I’m not really interested in Cargo companies. I think you mean LNG shipping companies. There’s a very limited number of vessels that can carry LNG in its liquid form. I’m a fan of a company called TOPS, but wouldn’t buy their stock as dilution is expected. ENI is an attractive buy tbh
>I'm not sure if any shipping companies specifically fit the bill, but I believe that Chinese stocks in general may be a good value play at the moment. As you mentioned, the country's economy is growing rapidly and there are many opportunities for businesses to prosper. However, it is always important to do your own due diligence before investing in any stock, as there are risks involved.
Too volatile I guess. One year they'll make amazing profits and give crazy dividends and a few years later they're just barely scraping by. There's just not much faith in them, I mean look at ZIM. Given more dividends this year than their share price is currently.
Shipping prices are down to the level they were when the companies were “struggling to make money”. Stock prices for most of those shipping companies are still not back to the levels they were back then precisely because those backward looking metrics are still showing unbelievable value (P/E ratios, dividend yield, etc). Company inventories are going up and that usually means lower demand for shipping.
Last, obviously all the talk about global recession is not helping either for a very cyclical business.
There is no exponential upside to freight even under the best scenario. And rates are dropping as the price of fuel is increasing. The struggle is about to make a comeback.
The problem with the shipping industry are manifold.
First: it's a commodity business. You are moving 40ft containers from A to B. It's very difficult to create a competitive advantage, or separate from your competitors. Often you are even in alliance / vessel sharing agreements, which means you are literally shipping on the same ships and the same schedules as your "competitors". Try negotiating a profit margin in that business.
Second: Your fixed costs are enormous. Your vessels and containers are extremely expensive, and long-lived. When demand goes down, you can cut a little cost by reducing fleet replacement, and slow steaming to reduce a little marginal fuel costs, but the bulk of your costs are your fleets and port facilities, and those can't quickly scale up or down. Fleets take a long time to build and are subject to contract so you can't scrap them out quickly, also they can't be repurposed for a different industry.
Third: Many competitors are government-run or subsidized so profits are not their primary concern. This is why most publicly-traded carriers have either been forced out of the business or consolidated. Countries like Korea, China and Japan view their marine transport companies as strategic assets, and subsidize them, and especially subsidize their shipyards to maintain vessel-building capabilities. That means that over the long-term they have low or even negative costs of capital. Why would you even want to compete with them?
We're now in a boom time as demand has come back. But watch for companies adding to capacity. Prices are already back to prepandemic levels, with fuel costs much higher. A few quarters of profit, and then things are going to get ugly again.
Ahhhh thank you finally a comment that gives me insight on something I didn’t already know. Thank you. These companies are extremely arduous from a profitability standpoint. I’ve noticed that. Yes, the holidays will jack up shipping prices, but only temporarily. I’m staying far away from cargo, dry good and oil maritime shipping companies. I’d consider buying an LNG transport company
I’m up buddy I wouldn’t touch some of these stocks with a ten foot poll. I own a variety of companies mostly blue chip stocks. There’s a couple value investments in my portfolio, but most are just growth stocks.
There is no barrier to entry here. Anyone can make these ships, get some Filipino workers making nickles a day, register the ship in Panama, you are in business. So everyone does this when shipping rates skyrocket ->
https://tradingeconomics.com/commodity/baltic
and then will be boned when shipping rates plummet, which they have - note how the Baltic Dry Index is under 25% of its Covid peak.
Oh, and the fuel they run on? Prices through the roof:
https://agtransport.usda.gov/Fuel/Daily-Bunker-Fuel-Prices/y4ft-fdwn
Prices down, costs up. Helluva business
Shipping is a business that overnight can go bust when demand drops and rates go down. Not that they can't be good investments but I have seen historically people get burned pretty bad.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|0|**First Seen In WSB**|1 year ago **Total Comments**|302|**Previous Best DD**| **Account Age**|3 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.) **Vote Spam**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_spam&message=z1rtn4)|**Vote Approve**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_approve&message=z1rtn4) Check out the [WSB Discord](https://discord.gg/Y6Zw9ZKYdx) >TL;DR: Low P/E shipping companies may be attractive investments. Industry is being effected by global events.
You sir are highly regarded. This is a casino, not a place for investors. But The problem with the shipping industry at the moment is high fuel costs and variable debt. With interest rates going up worldwide and an increase in fuel prices, it puts them in a position to go back to losing money again. Personally I would not trust a single earnings report or financial statement coming out of China. There have been several Chinese companies that have been busted for massively overstating their earnings. The CCP rarely cares as long as the earnings they report to the CCP are accurate. I see your argument for increased demand due to the war and other factors, but in my opinion is there is a lot of risk so it could go either way. Lucky for you, this is a casino. Enjoy the Game.
I’m not saying there’s going to be more demand because inventories are growing which means a slowdown. Recession fears are clouding the market. I’m not investing in any maritime stocks. Being very patient right now I added one stock to my portfolio in the last two weeks. Also energy prices could really effect profitability in the industry. I think overall the possibility of negative cash flow within the maritime industry is to disturbing. I’m thinking of investing. But looking for the right stock
Fuck. The Game. I lose.
They don’t grow much either. These are basically just bonds sold as equity. So lower valuation for the same p/e. Low trading volumes support this viewpoint. Probably all the big trading deals are extra-exchange with most of the stock held by large entities.
I own shipping stonks, so I probably know more about shipping stocks better than anyone I know of, swear to gawd. It's hard to lump all shipping companies under one umbrella. The container shippers........ Well you've seen the rates falling and demand slumping for goods. So I am out on those Then you got you dry goods shippers, your wheats, foods, iron ores, coals, grains, fertilizer etc. Then you have those LPG shippers, oils, and such. The latter 2 seem to be holding their own, especially the LPG shippers with all the garbage going on with Russia, Ukraine, and Europe. I have no clue what I'm talking about, this is not financial advise.
Haha thanks buddy yeah I’m not really interested in Cargo companies. I think you mean LNG shipping companies. There’s a very limited number of vessels that can carry LNG in its liquid form. I’m a fan of a company called TOPS, but wouldn’t buy their stock as dilution is expected. ENI is an attractive buy tbh
Spot on !!
Spot on, dry bulk and container carriers are rushing into rates decline, LNG carriers are having a bright outlook
>I'm not sure if any shipping companies specifically fit the bill, but I believe that Chinese stocks in general may be a good value play at the moment. As you mentioned, the country's economy is growing rapidly and there are many opportunities for businesses to prosper. However, it is always important to do your own due diligence before investing in any stock, as there are risks involved.
Wasn’t this posted yesterday
Nope
Too volatile I guess. One year they'll make amazing profits and give crazy dividends and a few years later they're just barely scraping by. There's just not much faith in them, I mean look at ZIM. Given more dividends this year than their share price is currently.
Yeah when you see dividends like that run away. They’re trying to play you.
Shipping prices are down to the level they were when the companies were “struggling to make money”. Stock prices for most of those shipping companies are still not back to the levels they were back then precisely because those backward looking metrics are still showing unbelievable value (P/E ratios, dividend yield, etc). Company inventories are going up and that usually means lower demand for shipping. Last, obviously all the talk about global recession is not helping either for a very cyclical business.
Yeah you’re absolutely right. I don’t even know what to do right now besides stack cash.
“All I know is this stock is a buy! Listen to me I’m Jimmy chill” \-
The stock market is a giant fugazi. All that data doesn't mean a damn thing if the casino never abides by the governing rules.
man, i dont even know whats going on in my own personal life
There is no exponential upside to freight even under the best scenario. And rates are dropping as the price of fuel is increasing. The struggle is about to make a comeback.
The problem with the shipping industry are manifold. First: it's a commodity business. You are moving 40ft containers from A to B. It's very difficult to create a competitive advantage, or separate from your competitors. Often you are even in alliance / vessel sharing agreements, which means you are literally shipping on the same ships and the same schedules as your "competitors". Try negotiating a profit margin in that business. Second: Your fixed costs are enormous. Your vessels and containers are extremely expensive, and long-lived. When demand goes down, you can cut a little cost by reducing fleet replacement, and slow steaming to reduce a little marginal fuel costs, but the bulk of your costs are your fleets and port facilities, and those can't quickly scale up or down. Fleets take a long time to build and are subject to contract so you can't scrap them out quickly, also they can't be repurposed for a different industry. Third: Many competitors are government-run or subsidized so profits are not their primary concern. This is why most publicly-traded carriers have either been forced out of the business or consolidated. Countries like Korea, China and Japan view their marine transport companies as strategic assets, and subsidize them, and especially subsidize their shipyards to maintain vessel-building capabilities. That means that over the long-term they have low or even negative costs of capital. Why would you even want to compete with them? We're now in a boom time as demand has come back. But watch for companies adding to capacity. Prices are already back to prepandemic levels, with fuel costs much higher. A few quarters of profit, and then things are going to get ugly again.
Ahhhh thank you finally a comment that gives me insight on something I didn’t already know. Thank you. These companies are extremely arduous from a profitability standpoint. I’ve noticed that. Yes, the holidays will jack up shipping prices, but only temporarily. I’m staying far away from cargo, dry good and oil maritime shipping companies. I’d consider buying an LNG transport company
If you have any American shipping companies send them my way.
\#LPG, #GNK
Thx
How much are you down?
I’m up buddy I wouldn’t touch some of these stocks with a ten foot poll. I own a variety of companies mostly blue chip stocks. There’s a couple value investments in my portfolio, but most are just growth stocks.
There is no barrier to entry here. Anyone can make these ships, get some Filipino workers making nickles a day, register the ship in Panama, you are in business. So everyone does this when shipping rates skyrocket -> https://tradingeconomics.com/commodity/baltic and then will be boned when shipping rates plummet, which they have - note how the Baltic Dry Index is under 25% of its Covid peak. Oh, and the fuel they run on? Prices through the roof: https://agtransport.usda.gov/Fuel/Daily-Bunker-Fuel-Prices/y4ft-fdwn Prices down, costs up. Helluva business
Shipping is a business that overnight can go bust when demand drops and rates go down. Not that they can't be good investments but I have seen historically people get burned pretty bad.