Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buy in (Dry) Bulk: Diana, Teekay, Genco

By

Shipping stocks catch gust.

PrintPRINT
The session isn't as bad as it looked moments before the open, but by the same token it's a lot worse than it looked two hours before the start of trading.

There are some very interesting things happening beneath the surface. Home builders, semiconductors and broker dealers are higher. Utility stocks are lower as are drug and tires. I think the most compelling stocks are the dry bulk shippers. The group had been under a fair amount of pressure after a meteoric rally that saw rates come on with a Tiger Woods-like rebound after swooning at the start of the year. I consider the dry bulk index the best barometer of the health of the global economy. There is no doubt at some point higher crude becomes the headwind everyone says it is but I'm still not sure that level has been reached yet.

Actionable ideas, Instant analysis. Real-time from bell to bell.
Minyanville's Buzz and Banter- 14 day Free Trial


On the global stage many nations are paying substantially more than the U.S. and yet their economies continue to improve. Obviously, on one hand, we would like oil to response to a demand tipping point by way of Americans saying "no mas," but by the same token, it would also be encouraging to know/see the economy getting better even in the face of this would-be headwind.

I have to say that recent slide in dry bulk rates could be more technical than some sort of reaction to higher crude. The long term trend is intact and today's action is compelling, however. My favorites in the group include Genco Shipping (GNK), which looks great today, Teekay Shipping (TK) and Diana Shipping (DSX). All of these stocks are oversold and have tremendous room on the upside.

The agriculture stocks are also impressive today as the group continues to prove it's more than a flash in the pan. A major brokerage firm finally got on board (never too late, I guess) and upgraded a couple of names, including Potash (POT) and Monsanto (MON).

Equipment maker Deere (DE) is putting in a strong session: Apparently the flooding in the Midwest will not hurt its manufacturing facilities. (On that note, my condolences and prayers are with the folks suffering from the extensive flood damage in the Midwest.)

The market has exhibited signs it wants to move higher, although for the Dow, General Electric (GE) will hang like a cement block around the ankles.


Click to enlarge

No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE