Investing in Shipping Stocks: A Prudent Idea with Kirby Corporation, ZIM Integrated Shipping, and Teekay Tankers
The Zacks Transportation – Shipping industry is currently experiencing a surge in demand, particularly in the liquefied petroleum gas (LPG) sector. The export of LPG, like propane, has been thriving, benefiting the U.S. economy as the largest exporter of gases like propane and butane. This has led to a boost in the prospects of transporters of LPG, with seaborne LPG gas volumes on the rise since the pandemic.
Furthermore, factors such as tensions in the Red Sea, limited container availability, and the re-opening of the China economy have contributed to increased freight costs and boosted industry participants. The strong outlook for the Capesize market also adds to the positive sentiment surrounding shipping stocks.
Additionally, the fall in oil prices has been advantageous for shipping stocks, as fuel expenses represent a key input cost for transportation players. With oil prices declining in the April-June period, the bottom-line growth of shipping stocks has been positively impacted.
The Zacks Industry Rank #41 for the transportation – shipping industry places it in the top 16% of more than 250 Zacks industries, confirming the buoyancy in the sector. Year-to-date, the industry has gained 20%, outperforming the S&P 500 Index and the Zacks Transportation sector.
In light of these favorable conditions, investing in shipping stocks seems like a prudent idea. Three shipping stocks that investors can consider are Kirby Corporation (KEX), ZIM Integrated Shipping Services Ltd. (ZIM), and Teekay Tankers Ltd. (TNK). These stocks have a Zacks Rank #2 (Buy), a VGM Score of A or B, and a solid expected earnings growth rate for the current year. They have also witnessed upward estimate revisions in the past 90 days.
Kirby Corporation, headquartered in Houston, TX, operates domestic tank barges in the United States and has been implementing consistent shareholder-friendly initiatives. ZIM Integrated Shipping, based in Haifa, Israel, provides container shipping services internationally and has seen a surge in its stock price. Teekay Tankers, headquartered in Hamilton, Bermuda, offers marine transportation services to oil industries and is benefiting from the resumption of economic activities and the uptick in world trade.
These stocks have market capitalizations of over $1 billion each and have gained more than 30% year-to-date, outperforming the industry. With a positive outlook for the shipping industry and these specific stocks, investors may find compelling investment opportunities in this sector.
For more information and to access the complete list of today’s Zacks #1 Rank (Strong Buy) stocks, you can visit Zacks Investment Research. Don’t miss out on the potential growth and profitability that shipping stocks may offer in the current market environment.
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