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Why Costamare Sank 14.1% in September

By Rich Duprey – Oct 5, 2020 at 3:16PM

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The container shipping magnate may have just been caught by a rogue wave that swamped the industry.

What happened

Shares of Costamare (NYSE: CMRE) fell 14.1% in September, according to data from S&P Global Market Intelligence, after it got caught in the downdraft that plagued shipping stocks in the middle of the month.

So what

Costamare's stock had been on the rise early in the month, as there were signs the market for container ships was returning. The Wall Street Journal reported container imports into the U.S. were on the rise, and as my colleague Rich Smith noted, the cost of shipping a container from Shanghai to California was at a record level.

Container ships at sea

Image source: Getty Images.

But doubts persist that the recovery has staying power, and shippers bringing in commodities, whether bulk or energy laden, tanked in the middle of the month. While container shipping stocks are in a better position than their brethren, they declined sharply along with the rest, with Costamare falling 10% in one day.

Now what

Smith thinks Costamare's stock is just too good of a value to pass up at these levels, but one Jeffries analyst told industry news site FreightWaves, "It doesn't really matter what you think from a valuation perspective until there's a catalyst to get people to want to look at it again."

That might have applied more to those shippers not bringing in containers, but it was a sentiment that dragged them down nonetheless. Still, by month's end, Goldman Sachs was on board with a bullish outlook for Costamare, and over the past week its stock is up over 27%.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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