This fireside chat recap is from Day 8 of FreightWaves Global Supply Chain Week. Day 8 focuses on global maritime logistics.
FIRESIDE CHAT TOPIC: Investing in container-shipping stocks
DETAILS: Stock traders and investors have three main ways to play container shipping: They can buy shares of listed container liner companies, ship-leasing companies or box-leasing companies. Each offers different exposure to today’s cargo boom.
SPEAKER: Randy Giveans, senior shipping analyst, Jefferies
BIO: Giveans covers 31 shipping companies that transport crude oil, refined petroleum products, LNG, LPG, dry bulk commodities or containerized goods. In both 2019 and 2020, he was named to Institutional Investor’s All-America Research Team. In 2018, he was named an Institutional Investor All-America Research “Rising Star” and was ranked as the “#1 Stock Picker for Shipping” in the Thomson Reuters Analyst Awards. He has appeared on Bloomberg TV and CNBC, and has been quoted in The Wall Street Journal, Forbes, Fox Business, CNN and Bloomberg.
KEY QUOTES FROM GIVEANS:
“There hadn’t really been the opportunity to show how beneficial consolidation is until this past spring and early summer. They [liner companies] showed that they can pull off and on supply very quickly to keep rates at decent levels. What we’re seeing now is all of these record quarters and very strong profitability. Every vessel that’s on the water is full. Rates are at an all-time high. So, 2021 is going to be a very good year for these liner companies.”
“We’re seeing supply growth of maybe 3% this year, maybe a little less in 2022, whereas demand will probably grow by 5% if not more both this year and next. The supply-demand fundamental backdrop is robust — and that’s why they [container-ship leasing companies] are able to secure 18- or 24-month charters at $25,000, $30,000, $35,000 a day.”
“Shipping is the place to be anytime you have an investor rotation from momentum and growth names into economically sensitive, value, global-trade-oriented names. That’s why we’re very bullish on shipping, and on container shipping specifically.”