In early January, the last time we checked the Baltic Dry Index, it appeared to be on the comeback trail after a dismal 2012, the worst year for the index since 1986. A look today at the index, a measure of the costs to ship what are called “dry bulk commodities,” suggests the upswing may indeed be here.
The index has continued to rebound substantially, according to theStreet.com (http://www.thestreet.com/story/11978236/1/cramer-this-may-bump-china-off-the-radar.html). And, as Jim Cramer says in the article, the index was a great indicator when it was on the way down so if it’s on the way up, maybe it’s now indicating great things to come. The index closed Monday, July 15 at 1,149. Its 52-week range is 661-1,179.
The shipping business is very complex “with myriad variables such as vessel size, age, range, cargo and sea route that affect freight rates,” according to a recent post on Naftrade.com (http://www.naftrade.com/3/post/2013/07/is-shipping-recovery-on-the-horizon.html?goback=%2Egde_47685_member_257928631). But many experts believe the worst is over.
So how are the small cap dry-bulk shippers that we posted on Jan. 11 doing now?
Athens-based Safe Bulkers (NYSE: SB, http://www.safebulkers.com/) is a holding company with 33 subsidiaries and a fleet of 20 drybulk vessels. The fleet consists of five Panamax, three Kamsarmax, 10 post-Panamax and two Capesize vessels. SB purchased two vessels (a post-Panamax and Capesize) during 2011. SB closed Jan. 9 at $4.10 with a market cap of $314 million. SB closed July 17 at $5.11, no change for the day. Its market cap is now $391.8 million.
Athens-based Star Bulk Carriers (Nasdaq: SBLK, http://www.starbulk.com/en/home) owns and operates a fleet of 14 vessels including six Capesize carriers and eight Supramax carriers. Two of the carriers were purchased in 2011. Back on Jan. 9 SBLK closed at $7.06 with a market cap of $38 million. It closed July 17 at $5.46, no change for the day. Its market cap is now $29.5 million.
Athens-based Paragon Shipping * (NYSE: PRGN, http://www.paragonship.com/) has a fleet of 12 vessels. Last time we checked PRGN in January its stock price had nearly doubled in a week. PRGN closed Jan. 9 at $4.42 (it had been $2.50 on Jan. 4) with a market cap of $27 million. It closed July 17 at $4.01, no change for the day, with a market cap of $44 million.
Piraeus, Greece-based Navios Maritime Holdings (NYSE: NM, http://www.navios.com/) has tanker and logistics business divisions as well as a dry-bulk fleet (total number of vessels is 31 plus 26 chartered vessels it operates). NM closed Jan. 9 at $3.76 with a market cap of $380 million. It closed July 17 at $5.49, up 2 cents on the day, with a market cap of $566.8 million.
* Denotes client of Allen & Caron Inc., publisher of this blog