Shipping has been in the spotlight in recent weeks after the Ever Given became stuck within the Suez Canal. The ship was freed and subsequently impounded by Egyptian authorities.
The shipping sector is also grabbing investors’ attention because the global economy is sparking back to life and the transportation of products is will shortly reclaim its traditional vitality. Also, the prices of most consumer products are starting to rise, making efficient shipping that much more important. For investors not already long in shipping stocks, now may be the time to consider establishing a position.
Three shipping stocks that we think might be worthy of a place in one’s portfolio are ZIM Integrated Shipping Services (ZIM), Matson (MATX) and Global Ship Lease (GSL). Fittingly, we have accorded each of these names a “Strong Buy”.
ZIM Integrated Shipping Services (ZIM)
ZIM, is an Israel-based provider of container shipping and additional shipping services. It is focused primarily on cargo. The company’s cargo services include breakbulk, out of gauge, project, reefer, dangerous and dry cargo. ZIM is one of the top 20 carriers in the world.
ZIM is attractive for several reasons: The stock has a surprisingly low forward P/E ratio of 3.76. ZIM is currently trading just a few dollars away below its 52-week high of $31.28. This means ZIM has a way to go before its forward P/E ratio equals that of most stocks in its sector. In short, ZIM appears to be significantly undervalued.
Though ZIM stock prices has advanced over the past six months—moving from $11 in January to its current price just under $30—it has the potential to move even higher. The inevitable rise in consumer demand as the pandemic winds down combined with a rebounding economy could send ZIM to new heights as the year progresses.
ZIM has an overall B grade in the POWR Ratings. The stock has an A grade in the Quality component and Bs in the Sentiment and Value components. Investors who would like to learn more about how ZIM fares in the other POWR Ratings components can do so by clicking here.
Of 49 publicly traded companies in the Shipping space, ZIM is ranked third. One can find out more about this segment by clicking here.
MATX is a logistics and transportation specialist that provides multimodal transportation services throughout North America. The company also provides rail intermodal services both domestically and abroad.
MATX has a forward P/E ratio of 12.54, a figure that indicates the stock is reasonably priced or possibly even slightly underpriced. Currently, MATX is trading $10 below its 52-week high of $79.05. The stock’s 52-week low is $23.75.
MATX has an A grade in the POWR Ratings, meaning it is a Strong Buy. The stock also has an A grade in the growth component of the POWR Ratings, along with Bs in the Value and Quality components. Click here to learn how MATX fares in the other POWR Rating components, such as Momentum, Sentiment and Stability.
Of the 49 stocks in the shipping space, MATX is ranked first. The Shipping has a C POWR Ratings grade. One can learn more about the stocks in the Shipping segment by clicking here.
Global Ship Lease (GSL)
GSL’s modern containership fleet is essential to worldwide shipping. The company also charters vessels through fixed-rate, long-term arrangements with some of the world’s top shipping businesses.
GSL has an attractively low forward P/E ratio of 5.19. The stock could break through its 52-week high of $17.85 and its forward P/E ratio would still be quite low. Currently, GSL is trading about $4.50 below its 52-week high.
GSL has an A POWR Rating grade, with an A in the Value component and Bs in the Quality and Sentiment components. Click here to see how GSL fares in the other POWR Ratings components such as Momentum, Stability and Growth.
GSL is also very appealing considering it is ranked second of 49 stocks in the Shipping space. One can learn more about shipping stocks by clicking here.
ZIM shares were trading at $28.38 per share on Wednesday afternoon, up $0.01 (+0.04%). Year-to-date, ZIM has gained 146.78%, versus a 10.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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