Wall Street Gives Shipping Stocks the Green Light ... Should You?

Jim Cramer gave a recommendation for Diana Shipping (NYSE: DSX  ) , saying that he sees a bottom in the dry bulk shipping market at the moment, and Five Star Equities has come out saying that shipping rates could triple by 2015. All of this optimism around the industry has several shipping stocks popping today, such as Diana, Navios Maritime (NYSE: NM  ) and DryShips (NASDAQ: DRYS  ) . But is all of this optimism really as cut and dry as it seems? In the below video, Fool industrials analyst Blake Bos takes a close look at several shipping stocks and the industry as a whole, to give investors a more nuanced picture of what they should focus on when investing in this industry. He also tells us why the Baltic Dry Index, or BDI, featured in the graph below, will be a vital metric to follow for every shipping investor.

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  • Report this Comment On March 22, 2013, at 7:28 PM, winnerli wrote:

    Shipping sector had a great run today. Whole sector is way undervalued, expect to continue uptrend. See the chart:

  • Report this Comment On March 23, 2013, at 9:58 AM, imacg5 wrote:

    The sector is NOT undervalued.

    All of these companies except DSX and the Navios companies, have been in breach of loan covenants.

    Their ship values are not even worth the debt held against them.

    Even DSX will be losing money this year as some of their legacy charters come to an end and are replaced with charters that are below break even.

    Cramer proves once again, as he has for the last six years, that he hasn't done more than 10 minutes research, and knows nothing about dry bulk except the ticker symbols.

    As for DRYS, the shares that Michael Webber says that they might sell are the shares of ORIG that DRYS has owned since the spin off.

    The sale of those shares is NOT dilutive to either company. It does weaken DRYS in that ORIG is the only part of DRYS that anyone finds value in.

    The Dry Bilk sector is not close to a recovery. They continue to build more ships than they need, including scrapping.

    This is temporary rise in the BDI from a seasonal grain trade, and a typical rally in the share prices that has no fundamental justification.

    The BDI and the share prices will again collapse this summer.

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9/27/2016 3:59 PM
DRYS $0.44 Down -0.03 -5.64%
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NM $1.18 Down +0.00 +0.00%
Navios Maritime Ho… CAPS Rating: ***