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After a wave of bankruptcies in the shipping industry, any shipping stock still afloat is likely to survive. Operating from Asia yields an advantage to the survivors based on proximity to the world’s fastest growing economies. Seaspan Corp. (SSW, quote) is a rising shipping stock where others have fallen.
South Korea’s industrial giants have dominated the global shipbuilding industry for close to a decade, but U.S. traders who want to buy into one of the world’s top shipyards may want to think twice.
Traders are famously obsessed with the Baltic Dry index of shipping costs for its ability to forecast not only commodity trends but the outlook for manufacturing and the global economy. Its downward legs may not always be accurate indicators, but its upward swings are a lot more reliable.
Global shipping sailed into a perfect storm of adverse conditions in 2011. With trade down, fuel prices rising, and a glut of vessels, the Guggenheim Shipping ETF (SEA, quote) took a dive. Sembcorp Marine (SMBMF, quote) fell on hard times as well, but the Singapore-based repair company offers a lot as shipping begins to recover.
