The accompanying table [click to enlarge] includes statistics for the 61 companies included in the ETF Innovators [ETFI] Global Maritime Transport Index, which must have market caps of at least $100M. The index has lost about 64% over the past year on an equally-weighted basis, compared to declines of about 29% for the iShares Dow Transports ETF (IYT), 42% for the S&P 500 SPDR (SPY), and 62% for the Claymore/Delta Global Shipping ETF (SEA) – with SEA launched only recently in early September just before the global economic slowdown and credit/equity market turmoil gained momentum.
As an example of the extreme valuations placed on shipping stocks at both the top and the bottom, DryShips (DRYS) has lost over 90% of its market value in the past year with an astounding stock price range of $3-$116 and is now trading for around 5 bucks, mirroring the precipitous decline in the Baltic Dry Index and day rates that maritime transport companies receive for their services. Only one stock managed to post a stock price gain over the past year, Nordic American Tanker (NAT), which enjoys a strong balance sheet with no debt.
The bottom line for investors and traders is to watch the shipping stocks because they are excellent trading vehicles with extreme volatility and also provide a proxy for the condition of the global economy, in conjunction with monitoring commodity prices, the Baltic Dry Index, and day rates.
As an example of the extreme valuations placed on shipping stocks at both the top and the bottom, DryShips (DRYS) has lost over 90% of its market value in the past year with an astounding stock price range of $3-$116 and is now trading for around 5 bucks, mirroring the precipitous decline in the Baltic Dry Index and day rates that maritime transport companies receive for their services. Only one stock managed to post a stock price gain over the past year, Nordic American Tanker (NAT), which enjoys a strong balance sheet with no debt.
The bottom line for investors and traders is to watch the shipping stocks because they are excellent trading vehicles with extreme volatility and also provide a proxy for the condition of the global economy, in conjunction with monitoring commodity prices, the Baltic Dry Index, and day rates.
$31.53 (12/08/08)
