This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will a Glut Sink Shipping Stocks in 2010?

NEW YORK ( TheStreet) -- Anyone who follows the merchant-shipping industry knows that a coming onslaught of newly built vessels threatens to create a vicious oversupply in 2010.

The extent to which this burgeoning glut will, in turn, cause shipping rates to flop depends entirely on how many of the vessels on order get delayed or canceled. (Another relevant question: Will demand for raw materials globally -- and in China especially -- increase enough next year to soak up any excess supply?)

Every dry-bulk outfit in the world, no matter the size or the vessel-class it specializes in, has a stake in the outcome, from DryShips (DRYS) (market cap: $1.5 billion) to Top Ships (TOPS) (market cap: $32 million).

In the dry-bulk segment of the shipping industry in 2009, 35% of the vessels scheduled for delivery never saw the water. If owners annul a similar number of newbuildings in 2010, analysts and executives say, the industry may well avoid the worst-case-scenario.

But within the dry-bulk community, opinion is divided on just how much of the total industrywide orderbook will see cancellation. The projections run from a bearish 20% -- courtesy of FBR Capital Markets' shipping analyst, Robert MacKenzie -- to a bullish 45% -- see John Wobensmith, the finance chief at New York-based Genco Shipping & Trading (GNK), one of the rare companies with no ship deliveries scheduled for next year.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.54 0.00%
FB $80.29 0.00%
GOOG $533.99 0.00%
TSLA $249.45 0.00%
YHOO $43.35 0.00%

Markets

DOW 18,040.37 +29.69 0.16%
S&P 500 2,111.73 +4.34 0.21%
NASDAQ 5,082.9290 +12.9030 0.25%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs