Is Genco Shipping a Ride or a Slide?
Feb 29th, 2008 | By Charles Delvalle | Category: Stock Market InvestingThe other day I got an e-mail from Judy B., who was wondering if Genco Shipping (GNK) was a ride or slide stock.
Before I go on with this piece, I have to admit a bias: I LOVE SHIPPING COMPANIES!
With worldwide trade increasing every day, shipping companies will be used more and more. And in the past three years, the stock price of many of these shipping companies has doubled or even tripled.
With that said, I expect there to be a little bump in the road. The U.S. economy is shrinking. With that shrink, it imports less products than it exports, meaning trade goes down overall. That’s going to weigh on shipping companies a little bit. But only a little.
Genco seems to have a good fleet of ships, and the ships aren’t that old (a good thing for shippers). Better yet, taking a look at their financials, you’ll see they have amazing operating margins (more than 56 percent), great revenue growth (86 percent), and earnings growth (244 percent).
But that’s not even the best part – this company is trading at a forward P/E of only 7!!!! That means investors are projecting forward growth of at least 30 percent from here on out.
Listen, Judy, Genco – and almost any other strong shipping company – is definitely a stock you want to ride.
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Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
