We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bullish Price Movement Suggests Clear Waters for Shipping Stocks
Read MoreHide Full Article
Despite shipping rates coming down from their peak, companies within the shipping industry have continued to flourish. While an absence of high congestion has established a path to lower rates, any changes in China’s Covid-zero policy or possible ceasefire agreements in the Russia-Ukraine war have the potential to lift rates again.
And as we saw in recent weeks with the release of September’s CPI data, inflation is going to linger. While the Fed has gone into overdrive with rate hikes, even committee officials have acknowledged that they’ve done little to stem a 40-year high in inflation. That’s good news for shipping companies, as they’re able to charge higher rates and pass along the higher costs of doing business.
The Zacks Transportation – Shipping industry is currently ranked in the top 16% out of over 250 industries. This group has widely outperformed the market with at 29% return year-to-date:
Image Source: Zacks Investment Research
Why has this group continued to shine despite lower shipping rates? Two reasons – accelerated earnings growth and relative undervaluation. We can see this illustrated by the industry table below:
Image Source: Zacks Investment Research
Historical research has illustrated that roughly half of a stock’s future price movement can be attributed to its industry group. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. By focusing on stocks within the top industries, we can provide a constant ‘tailwind’ to our investing success.
The industry also boasts a large number of highly ranked stocks per our Zacks Rank, serving as another confirmation signal that this group is a great place to be. Let’s take a look at a Zacks Rank #1 (Strong Buy) stock that is outperforming the market and recently hit new 52-week highs, all while the major averages hover in deep correction.
International Seaways owns and operates a fleet of over 80 oceangoing vessels and is engaged in the global transportation of crude oil and petroleum products. INSW serves independent and state-owned oil companies, oil traders, refinery operators, and international government entities.
INSW has surpassed earnings estimates in three of the past four quarters, delivering a trailing four-quarter average earnings surprise of 8.31%. The stock has responded well and has advanced nearly 170% this year.
Image Source: Zacks Investment Research
Analysts have increased their EPS estimates for INSW across the board. For the third quarter, estimates have been revised upward by 13.85% in the past 30 days. The Q3 Zacks Consensus EPS Estimate is now $2.22 per share, translating to astonishing potential growth of 452.37% relative to the same quarter last year.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) identifies companies that have recently witnessed positive earnings estimate revision activity. The idea is that this more recent information can serve as a better predictor of the future, giving investors a leg up during earnings season. When combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
With an Earnings ESP +3.34% and a Zacks Rank #1 (Strong Buy) rating, another earnings beat may be in the cards for INSW investors when the company reports Q3 results on November 8th. Make sure to keep an eye on INSW as well as the shipping industry.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bullish Price Movement Suggests Clear Waters for Shipping Stocks
Despite shipping rates coming down from their peak, companies within the shipping industry have continued to flourish. While an absence of high congestion has established a path to lower rates, any changes in China’s Covid-zero policy or possible ceasefire agreements in the Russia-Ukraine war have the potential to lift rates again.
And as we saw in recent weeks with the release of September’s CPI data, inflation is going to linger. While the Fed has gone into overdrive with rate hikes, even committee officials have acknowledged that they’ve done little to stem a 40-year high in inflation. That’s good news for shipping companies, as they’re able to charge higher rates and pass along the higher costs of doing business.
The Zacks Transportation – Shipping industry is currently ranked in the top 16% out of over 250 industries. This group has widely outperformed the market with at 29% return year-to-date:
Image Source: Zacks Investment Research
Why has this group continued to shine despite lower shipping rates? Two reasons – accelerated earnings growth and relative undervaluation. We can see this illustrated by the industry table below:
Image Source: Zacks Investment Research
Historical research has illustrated that roughly half of a stock’s future price movement can be attributed to its industry group. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. By focusing on stocks within the top industries, we can provide a constant ‘tailwind’ to our investing success.
The industry also boasts a large number of highly ranked stocks per our Zacks Rank, serving as another confirmation signal that this group is a great place to be. Let’s take a look at a Zacks Rank #1 (Strong Buy) stock that is outperforming the market and recently hit new 52-week highs, all while the major averages hover in deep correction.
International Seaways, Inc. (INSW - Free Report)
International Seaways owns and operates a fleet of over 80 oceangoing vessels and is engaged in the global transportation of crude oil and petroleum products. INSW serves independent and state-owned oil companies, oil traders, refinery operators, and international government entities.
INSW has surpassed earnings estimates in three of the past four quarters, delivering a trailing four-quarter average earnings surprise of 8.31%. The stock has responded well and has advanced nearly 170% this year.
Image Source: Zacks Investment Research
Analysts have increased their EPS estimates for INSW across the board. For the third quarter, estimates have been revised upward by 13.85% in the past 30 days. The Q3 Zacks Consensus EPS Estimate is now $2.22 per share, translating to astonishing potential growth of 452.37% relative to the same quarter last year.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) identifies companies that have recently witnessed positive earnings estimate revision activity. The idea is that this more recent information can serve as a better predictor of the future, giving investors a leg up during earnings season. When combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
With an Earnings ESP +3.34% and a Zacks Rank #1 (Strong Buy) rating, another earnings beat may be in the cards for INSW investors when the company reports Q3 results on November 8th. Make sure to keep an eye on INSW as well as the shipping industry.