Shipping: Ebbs & Flows

Shipping - the segment that HohumYNWA really enjoys - well, the market seems to be selling out of the sector. Me, I made purchases of a shipping company each of the last five trading days. I won’t mention names from the last three trading days today (but they are fair game next week)

Dry bulk: Q3 is usually the strongest quarter for the segment. In 2024, maybe some of it is China. Or, other factors e.g. Russia/Ukraine war. But, Q3 has not been as strong. Still, I think there are some interesting dry bulk shipping names out there- Star Bulk (SBLK), Safe Bulkers (SB) & Golden Ocean (GOGL). I have a small GOGL stake, and added to the position on 10/14

Tankers: For the conventional tanker segments i.e. crude oil (dirty) or refined products (clean) , Q3 is usually the weakest quarter in the annual cycle. That said, forcing tankers to sail around the Cape of Good Hope for European & Mediterranean Sea deliveries or oil exports tightened the shipping market.
Some appealing names: International Seaways (INSW) - vessels in both clean & dirty trades (added to my position on 10/15), Scorpio Tankers (STNG) clean tankers, Hafnia Tankers (HAFN) - mostly clean tankers. HAFN only obtained a US stock listing in Q2 2024. Last month, the company moved their HQ (back) to Singapore (with no tax treaty between US & Singapore, and HAFN paying a significant dividend – the major risk is whether Singapore has withholding on the dividend). Quite okay with Singapore as a business location. Have an existing HAFN position. Not quite decided on whether the tax risk bothers me (for 2024, it would likely only effect the Q3 payout). Finally, a couple of dirty tanker players - Okeanis Eco Tankers (ECO) and Nordic American Tankers (NAT). Have a small ECO position. NAT’s price movement is more a YTD basis. Most of the others, the share plunge has been more recent

All 8 names listed pay a dividend. For some of them, the payout may bounce around more than others. INSW partially addresses this by paying a small common dividend (fixed) and a special dividend (variable). Of course, that then generally has tax implications.

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11/23
Well, at least for today, there’s a reasonable explanation for tanker names selling off. Pareto Securities, a major marine broker/analyst firm, downgraded the tanker sector–

Danish clean tanker company, Torm (TRMD), was one of the entities that received a downgrade. TRMD was a shipping name purchased last week. At least from what I’ve seen, Q3 numbers are going to be lower. But, as I mentioned in the OP, the conventional tanker segment usually has a weaker Q3, followed by a stronger Q4. The real question is, how much stronger? At this time - No idea.

From a planning perspective, it does appear Frontline (FRO) put more thought into a strategy - FRO fixed some of their vessels on above average time-charters. Not a lot of time charter coverage. But, makes sense as the company is more leveraged with a younger fleet of vessels. FRO is another fallen tanker name (down about 11 - 14% the last month)