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) -- The manufacturing and retail industries are showing signs of revival. As a result, dry-bulk shippers are getting some buzz. As shipping rates plummeted during the recession, investors aggressively sold the stocks. But hopes of a recovery are whetting their appetites.
Baltic Dry Index
, a gauge of worldwide shipping prices and demand, began a downward trend in June. It then flattened and began creeping up on Aug. 25.
(DRYS - Get Report)
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have since been getting more attention than usual.
But all three succumbed to quarterly net losses over the past year and receive "sell" ratings from our proprietary model. Here is a "buy"-rated shipper that retained profitability during the recession, trades at a discount to its peers and pays a fat dividend.
International Shipholding Corp.
isn't immune to the recession, but is faring better than its rivals. Second-quarter net income fell 41% to $11 million, but revenue climbed 63% to $100 million. Excluding a $15 million gain from the sale of a carrier in last year's second quarter, earnings rose almost four-fold.
The company's gross margin widened from 20% to 23%, and its operating margin stretched from 4% to 13%, helped by a 4% reduction in general and administrative expenses. The company has a diversified fleet of carriers, including eight car/truck carriers that transport
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The balance sheet is reassuring. International Shipholding increased its cash balance 242% to $70 million since the year-earlier period. A quick ratio of 2.2 demonstrates ample liquidity. Just $139 million of debt and a debt-to-equity ratio of 0.6 indicate conservative leverage.