IB Net Payout Yields Model

Invest like me - only at Covestor.com

ZIM: Fade The Houthi Induced Rally (Rating Downgrade)

By -

Update - Jan. 5, 2023

ZIM has surged to $15 due to ongoing issues in the Red Sea with the Houthi's attacking container ships. While shipping rates have surged, the issues will just add to the capacity problems through 2025 with new vessels coming online, instead of low rates revolving the problems.

-New container shipping equal to about 11% of the current fleet will enter the seas this year, according to DNB Markets estimates. DNB reckons shippers will add additional capacity equal to 7% of the current fleet in 2025. And the brokerage estimates that fleet utilization was only about 70% in 2023 before the disruptions—well below levels in recent years which have consistently been over 80%.

Finviz Chart

Original article posted on Dec. 31, 2023 

  • Shipping stocks like ZIM Integrated Shipping Services Ltd. have surged due to disruptions in the Red Sea caused by Houthi militants.
  • The attacks have led to longer travel times for ships, boosting container shipping rates to Europe and the East Coast of the US.
  • The short-term shipping surge is not expected to last, and ZIM's capacity growth through 2024 and weak shipping rates pose downside risks.
  • The stock is poised to retest the recent lows around $6.
As the shipping channel in the Red Sea has the been upset by Houthi militants, shipping stocks like ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) have soared. The stocks were crushed in 2023 due to weak container shipping demand and high new vessel supply hitting the market. My investment thesis is now turning Bearish on the stock following the surge to $12 this last week after ZIM traded down at $6.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Comments

Post a Comment

Popular posts from this blog

Occidental: Still Producing Too Much Oil

By -
Image
Though oil continues plunging, the oil giants continue producing more. For Q4, Occidental Petroleum (OXY) had roughly flat production. The worst part is that OXY plans to grow production by 2% to 4% in 2016. The stock has held up somewhat strong, but the inability to turn off the spigot remains troubling. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 
Read more

ChargePoint: Low Quality Beat

By -
Image
  ChargePoint beat FQ2'22 revenue estimates, but the losses are mounting. The company guided up FY22 numbers partly due to acquisitions. The stock still trades at an estimated 21x FY23 number leaving limited upside for the stock and reinforcing why venture funds sold 13.8 million shares. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » After  solid FQ2'22 earnings ,  ChargePoint Holdings  ( CHPT ) has seen a nice bump in the stock. Now investors have to confront the valuation divide and deal with the past insider sales likely leading to future sales on any stock rallies. My  investment thesis  remains very Bearish on the EV charging station stock on any rallies into the mid-$20s. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.  Update - Sept. 8 Be cautious when analysts strugg...
Read more

Aurora Cannabis: Deal Or No Deal

By -
Aurora Cannabis was left out of the major deal making in 2018. The cannabis company updated FQ2 guidance to revenues of $50 to $55 million with a continued focus on pure production growth. The stock is down as the market is becoming less impressed with commodity farming operations due to the prime Oregon example. The stock is below key resistance at $5.40 as medical cannabis patient totals failed to impress. As the end of 2018 came and went,   Aurora Cannabis   ( ACB ) was a notable absentee from the deal making in the cannabis market. Just about all of the other major Canadian cannabis players got large investments or signed up powerful partnerships, but the related stocks didn't generally maintain rallies following the deals. Based on the early legalization data in Canada and Oregon, the best option for Aurora Cannabis might actually be selling production capacity while the Canadian market remains hot. Read the full article on Seeking Alpha.  Disc...
Read more