Oil Tanker Stocks Surge on Suez Risk
On Wednesday, analysts at Deutsche Bank released a 48-page report, advising clients to remove money from dry-bulk stocks and put it into oil tankers.
The logic behind that recommendation had mostly to do with supply, or the number of ships on the high seas and their affect on rates. "Tankers should fare better than dry bulk in 2011 as supply growth peaks and cargo demand likely rebounds for seaborne crude and petroleum products," wrote the the firm's shipping analyst, Justin Yagerman, in the report. "With a more modest orderbook than dry bulk and higher leverage to developed economies, we expect a bottom in the tanker market and expect equities to move ahead of rates."
Then, on Friday, Wells Fargo analysts downgraded several dry-bulk names, including Diana Shipping (DSX), Genco Shipping & Trading (GNK) and Navios Maritime Partners (NMM). Those stocks were mixed on Friday, with Diana slipping 0.3% and Genco 1.5%. Navios Partners was up 0.7%, however.
Elsewhere, Eagle Bulk Shipping (EGLE)was down 0.5%. The company had a rough week after one of its largest charterers, Korea Line Corp., filed for receivership, sunk by the collapse in rates. Eagle Bulk said its exposure to the bankruptcy was modest. Others disagreed.-- Written by Scott Eden in New York >To contact the writer of this article, click here: Scott Eden. >To follow the writer on Twitter, go to http://twitter.com/ScottEden. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV