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The Zacks Analyst Blog Highlights Pangaea Logistics Solutions, GasLog Partners, and Nippon Yusen Kabushiki Kaisha

Zacks Equity Research
·7-min read

For Immediate Release

Chicago, IL – May 19, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Pangaea Logistics Solutions, Ltd. PANL, GasLog Partners LP GLOP, and Nippon Yusen Kabushiki Kaisha NPNYY.

Here are highlights from Wednesday’s Analyst Blog:

Here's What's Driving Shipping Stocks at the Moment

Shipping stocks, based on the cargo they carry, are mainly of three kinds: liquid carriers (tankers) that mainly transport oil and related commodities; container ships that mainly carry general merchandise; and dry bulk carriers that carry commodities like iron ore, coal, agricultural produce (mainly grains), etc.

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The market has been abuzz with the strength in the oil and gas sector that is pushing up prices to record levels. So most of us are already aware that the main drivers are high thermal requirements due to weather conditions and insufficient green energy supply; high industrial requirements as economies around the world continue to recover from the pandemic; and limited supply as Russian oil is rejected by the market and the U.S. struggles to fill the gap.

While this is naturally good news for oil and gas stocks, it is equally good news for the carriers because high demand is pushing up their rates.

As far as the general merchandise (finished goods) segment is concerned, here too is a familiar story, to do with supply chain congestion. Container ships in particular are still lined up at ports and it seems that there's still quite a lag in their loading/unloading operations. So container management is currently sub-optimal, leading to limited availability. As demand remains high, there's a corresponding increase in rates.

Container rates are so attractive, in fact, that dry bulk carriers continue to be moved to that market. This in turn is reducing competition in the dry bulk market and driving up rates. The market is so attractive right now that rates continue to climb despite China's lockdown and related cutback in dry bulk imports.

Another factor that is likely to lead to normalization in rates is fleet addition, which is expected to be very strong in the near future. IHS Markit estimates annual container fleet growth of 4.5% in 2022 and 7.5% in 2023, which will come on top of 4.3% growth in 2021. While the current strength may alleviate as we move through the rest of the year, rates are still likely to be higher historically.

The Baltic Dry Index gives us an idea about current strength. According to the latest numbers from May 17, the index is up 0.32% on the day, 46.34% on the month and 10.73% on the year.

Given such a positive backdrop, investors would be looking to invest. So here are a few stocks worth picking up today:

Pangaea Logistics Solutions, Ltd.

Pangaea Logistics provides seaborne dry bulk logistics and transportation services to industrial customers worldwide. Its dry bulk cargoes include grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone. Its ocean logistics services comprise cargo loading, cargo discharge, vessel chartering, voyage planning and technical vessel management. As of March 16, 2022, the company owned and operated a fleet of 25 vessels.

Pangaea Logistics belongs to the Transportation – Shipping industry (top 10%). Our historical data shows that stocks belonging to industries in the top 50%, when combined with a Buy rank, usually lead to further upside in the near term.

The Zacks Rank #1 (Strong Buy) company with Value, Growth and Momentum Scores of A, B and A, respectively, reported March quarter earnings that were 9.4% ahead of analyst estimates on revenue that missed by a sliver. So this is good reason for share price appreciation.

Additionally, the Zacks Consensus Estimate for the current year is up 41 cents (32.5%) in the last 7 days. Pangaea's revenue and earnings are expected to grow a respective 5.3% and 18.4% this year. This momentum is also likely to be rewarded by investors.

It is extremely cheap in terms of valuation as well, trading at just 3.18X earnings, which is well below its median level over the past year and compares favorably with the industry's 4.31X.

GasLog Partners LP

GasLog Partners LP acquires, owns and operates liquefied natural gas (LNG) carriers under multi-year charters. As of February 24, 2022, it operated a fleet of 15 LNG carriers. The company is based in Piraeus, Greece.

GasLog belongs to the Transportation – Shipping industry (top 10%).

The Zacks Rank #1 (Strong Buy) company with Value, Growth and Momentum Scores of A, C and C, respectively, reported March quarter earnings that were 17.1% ahead of analyst estimates on revenue that beat by 9.4%. The Zacks Rank, along with the attractive industry to which GasLog belongs, is good reason for the share price appreciation.

Analysts are also positive about GasLog's prospects. The Zacks Consensus Estimate for the current year is up 25 cents (16.1%) in the last 30 days. GasLog's revenue and earnings are expected to grow a respective 4.8% and 29.5% this year. This momentum is also likely to be rewarded by investors.

It is cheap in terms of valuation as well, trading at just 3.09X earnings, which is below its median level over the past year and the industry's 4.31X.

Nippon Yusen Kabushiki Kaisha

Nippon Yusen Kabushiki Kaisha has diversified operations, generally in the transportation services and logistics segments. Its global marine, land and air transportation services cater to all the three shipping segments discussed above.

Its logistics services span a broad range of liner trading services, such as container shipping, terminal and stevedoring services for containerships, car carriers and cruise ships, and air cargo transportation services.

Its bulk shipping services comprise transport services for finished automobiles, heavy construction machines and used cars. It also provides transportation services for bulk freight like iron ore, coal and wood chips.

Additionally, it offers transportation services for crude oil, petroleum products, chemicals, LNG, LPG and ammonia for oil, petrochemical and energy companies. Nippon Yusen is also involved in the upstream areas of the supply chain for oil and natural gas.

Nippon Yusen also operates Asuka II, a luxury cruise ship; and manages commercial and residential buildings. Nippon Yusen Kabushiki Kaisha is headquartered in Tokyo, Japan.

Like the others, Nippon Yusen belongs to the Transportation – Shipping industry and carries a Zacks #1 rank. The shares have been allotted Value, Growth and Momentum Scores of A, B and F, respectively.

While the details of its recent results aren't immediately available, analysts are clearly enthused by this stock's prospects. They currently expect the company to post revenue and earnings growth of 25.2% and 396.1%, respectively in 2022.

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Zacks Investment Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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GasLog Partners LP (GLOP) : Free Stock Analysis Report
 
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Pangaea Logistics Solutions Ltd. (PANL) : Free Stock Analysis Report
 
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