Please ensure Javascript is enabled for purposes of website accessibility

Why Safe Bulkers and Golden Ocean Group Stocks Are Up, but Castor Maritime and Diana Shipping Are Down

By Rich Smith - Updated Feb 16, 2021 at 4:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Prices for dry bulk shipping keep inching higher, but not everyone's benefiting.

What happened

There's more good news for investors in the dry bulk shipping industry today, but it isn't being shared equally across the industry. By 3 p.m. EST on Tuesday, shares of Monaco-based Safe Bulkers (NYSE: SB) and Bermuda's Golden Ocean Group (GOGL -2.87%) were enjoying strong gains, up 7.3% and 16.1%, respectively.

In contrast, Greece's Diana Shipping (DSX 0.36%) and Cyprus-based Castor Maritime (CTRM -4.46%) are both down: 8.3% and 9.6%, respectively.

Red arrow goes down and green arrow goes up

Image source: Getty Images.

So what

The ups are easier to explain than the downs this time around. On Monday, while U.S. stock markets were closed for the Presidents Day holiday, Safe Bulkers was reporting stronger-than-anticipated earnings for its fiscal fourth quarter. Instead of the $50.5 million in sales and $0.02 per share in profits that Wall Street had forecast, it collected $52.2 million in sales and doubled analysts' earnings prediction, at $0.04 per share.  

What's good news for Safe Bulkers could be good news for Golden Ocean, too -- or so investors may be hoping. Last week, Golden Ocean announced that it will deliver its fourth-quarter earnings before the market opens on Thursday this week. Analysts aren't looking for much: only a penny more profit than Golden Ocean earned a year ago, perhaps, and 25% less revenue.

Then again, given how much better Safe Bulkers performed than anyone expected, you can't rule out an earnings beat by Golden Ocean as well.  

Now what

This leaves Diana Shipping and Castor Maritime, which went down today when the other stocks rose. Last week, Diana stock enjoyed a big surge on hope that the cyclical shipping industry may be rebounding. Brokerage firm BTIG believes that Diana stock could double over the course of the year as the global recession recedes and shipments of dry bulk goods such as grain, coal, and iron pellets pick back up.

The latest data from the Baltic Exchange Dry Index appears to support that view, rising 5% in the last five reported days. But this same index fell nearly 30% from late January through early February, before blipping higher last week.

It may be too early to call this a trend just yet. And in case the rally in shipping rates stalls out, investors in Diana and Castor (up 90% and 850%, respectively, year to date through Friday's close) may be thinking now might be a good time to take some chips off the table,  and quit while they're ahead.

If that's what's happening today, Safe Bulkers' and Golden Ocean's rallies could be the next to fizzle.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Castor Maritime Inc. Stock Quote
Castor Maritime Inc.
$1.93 (-4.46%) $0.09
Diana Shipping Inc. Stock Quote
Diana Shipping Inc.
$5.64 (0.36%) $0.02
Golden Ocean Group Limited Stock Quote
Golden Ocean Group Limited
$15.56 (-2.87%) $0.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.