We recently published a list of the 10 Best Marine Shipping Stocks to Buy According to Analysts. In this article, we are going to take a look at where Star Bulk Carriers Corp. (NASDAQ:SBLK) stands against the other best marine shipping stocks to buy according to analysts.
Marine shipping is a critical component of the global economy, responsible for transporting approximately 80% of the world’s trade by volume. This industry serves as the backbone of international commerce by facilitating the movement of raw materials, manufactured goods, and energy resources across continents. The maritime shipping industry continues to face significant challenges as geopolitical tensions and security threats escalate in key shipping routes. Shipping companies have been forced to reconsider their routes, with many opting to divert vessels around the Cape of Good Hope, significantly increasing fuel costs and delivery times. These disruptions have far-reaching economic consequences, affecting supply chains and global trade.
Years of Challenges
In an interview with CNBC on November 27, Adrian Beciri, CEO of Ducat Maritime said that marine shipping has faced a series of setbacks over the years, including the disruptions caused by the COVID-19 pandemic, hyperinflation, manpower shortages, and the aftermath of conflicts such as the war in Ukraine and tensions in the Middle East, including the blockage of the Suez Canal. These events have compounded the issues within the marine shipping sector and continue to affect the industry.
Beciri highlighted the intrinsic difficulties of the shipping sector, particularly the demanding nature of the work, coupled with economic challenges that have contributed to a labor shortage in the shipping industry, a problem that is often overlooked by the broader market. The CEO also expressed concerns about the potential impact of the president-elect’s announcement of new tariffs on several countries, which could further complicate supply chains and necessitate a shift towards regional or zonal trading blocks. Such a shift could disrupt the historical patterns of international trade, which are based on the comparative advantages of large nations and the principles of free trade. Looking ahead, Beciri emphasized the importance of stable and consistent markets and policies to foster long-term investments and adjustments within the industry. He called for a conducive environment that would allow firms to make significant investments.
Despite the mounting challenges faced by the maritime shipping industry, it remains an indispensable pillar of global trade.
A hugh vessel carrying hundreds of containers passing by a small fishermen boat.
Our Methodology
To compile our list of the 10 best marine shipping stocks to buy according to analysts, we used Finviz and Yahoo stock screeners to find marine shipping companies with a market cap of over $500 million as of December 24. From that list, we narrowed our choices to 10 stocks that analysts see the most upside to. We also included the number of hedge fund holders for these companies, which was sourced from Insider Monkey’s Hedge Fund database as of Q3 2024. The list is sorted in ascending order of analysts’ average upside potential, as of December 24.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Star Bulk Carriers Corp. (NASDAQ:SBLK)
Upside Potential: 73.38%
Number of Hedge Fund Investors: 24
Stock Price as of December 24: $15.25
Star Bulk Carriers Corp. (NASDAQ:SBLK) is one of the largest dry bulk shipping companies in the world, operating a diverse fleet of vessels that transport commodities such as iron ore, coal, and grain. The company operates a diverse fleet of 156 vessels across all segments, with an average age of 11.9 years.
Star Bulk Carriers Corp. (NASDAQ:SBLK) has demonstrated a strategic approach to growth through a series of acquisitions and fleet optimizations. Since 2018, the company has completed nine mergers and has significantly expanded its fleet by 75% in terms of vessel numbers. These acquisitions, including the recent integration of Eagle Bulk, have increased the company’s market presence as well as enhanced operational synergies and cost efficiencies. The integration of Eagle Bulk has resulted in over $9 million in cost savings, with further potential for savings in operating expenses (OpEx) and dry dock costs.
Star Bulk Carriers Corp. (NASDAQ:SBLK) continues to opportunistically sell older and less efficient vessels, using the proceeds to buy back shares at prices below their net asset value (NAV). This strategy has allowed the company to deleverage, reducing its net debt per vessel by more than 50% and ensuring that the scrap value of its fleet comfortably covers current net debt. Finally, the company owns six debt-free vessels with an aggregate market value of more than $100 million.
Overall, SBLK ranks 3rd on our list of best marine shipping stocks to buy according to analysts. While we acknowledge the potential of SBLK to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBLK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.