Who are the biggest losers among shipping stocks so far this year?
Dorian LPG and Nordic American Tankers suffer biggest losses since January
What started as a great year for shipping equities has transformed into an ugly one. Shipping stocks are increasingly in the red, year to date, with some posting large double-digit losses and heavily underperforming the broader equity market
WHAT a difference a few months make. In May and June, shipping stocks were flying high, handily outpacing the broader stock market. After a weak summer and a disastrous October, shipping stocks are floundering — and there are some big losers emerging.
Which shipping stocks are faring the worst? Lloyd’s List looked at two metrics: the year-to-date change in adjusted closing price, which accounts for dividends, and the change in market capitalisation, which does not.
The calculations excluded microcaps, which trade differently than larger shipping equities. The changes in the larger-cap shipping equities were then compared to the SPDR S&P 500 exchange-traded fund, the most popular and most passive way to bet on the broader stock market.
Fall in adjusted closing price
Dorian LPG had been the best US-listed shipping equity over recent years. That has completely reversed. As a result of weak sentiment on very large gas carrier spot rates, as well as Dorian’s equity offering in June at the stock’s peak, the company’s equity is the worst performer among US-listed shipping names year to date.
Dorian hit a new 52-week low on Monday. Its price is down 29% from the adjusted closing price on January 2. In contrast, the SPDR S&P 500 ETF is up 22% YTD.
Shares of suezmax owner Nordic American Tankers, which have traditionally been popular with retail traders, have fared second-worst, down 20% versus the adjusted close at the beginning of this year, and also hitting a fresh 52-week low on Monday.
NAT’s claim to fame is its dividends, but it faces an issue with a debt facility from Texas’ Beal Bank maturing in February 2025.
The other big losers are in liquefied natural gas shipping. LNG spot rates have recently fallen to historic lows. Despite their contract coverage, shares of Flex LNG and Cool Co both hit new 52-week lows on Monday, and were down 17% and 14% YTD, respectively.
Sliding market caps
Market cap — the number of shares outstanding multiplied by the non-adjusted share price — does not take into account dividends (and thus total returns). Nevertheless, it is an important metric among investors.
Dorian LPG is again the biggest loser in this category, with market cap down 31% YTD, falling $543m since January.
The market cap of CMB.Tech (formerly Euronav) is down 27% YTD, but in nominal terms it is the biggest loser. It also hit a new 52-week low Monday.
CMB.Tech paid significant dividends, so its adjusted share price is actually still up YTD, but it’s market cap is down almost a billion ($951m) since January, exceeding the market-cap losses of any other US-listed shipping equity.
The Saverys family took control of Euronav and forced a company-altering, related-party transaction for the purchase of its CMB fleet, which is focused on decarbonisation.
Shipping analyst Michael Webber publishes an annual ranking of shipping companies based on corporate governance. CMB.Tech was by far the worst performer in terms of year-on-year changes, falling 11 positions from a ranking of 16th in 2023 to 27th this year.
NAT’s market cap is down $896m since the beginning of the year, or 27%, second only in nominal terms to CMB.Tech’s decline.
In the gas shipping sector, Flex LNG’s market cap is down $381m YTD or 23%, and Cool Co’s market cap is down $158m or 23%.
Yet another big market-cap loser this year is product tanker owner Torm. While its adjusted share price has not fallen sharply, its market cap is down 13% or $385m YTD. Its non-adjusted share price is down 19% YTD. Like the others, it also hit a new 52-week low on Monday.
