Making Sense of the Explosive Shipping Stocks (TOPS+132%), (SINO +32%), (SHIP) +(RIGP)

Steve Kanaval  |

Shipping stocks are all moving today with mergers, short covering and portfolio rotation we have been following these, for more information click the link for previous articles. The entire sector has been up during Q2 and Q3 in 2016 and the trend continues. Top Ships (TOPS) is a mover today +132% and you can see the combination of rotation and short covering fueled by acquisition fever is driving the sector higher, we have been writing about these stocks during this quarterly portfolio rotation.

Transocean Ltd. (RIG) and Transocean Partners LLC (RIGP) today announced that Transocean has agreed to acquire all of the outstanding common units of Transocean Partners not already owned by Transocean in a share-for-unit merger transaction. This has set off a continued rally in Shipping Stocks as we get a rotation by funds into the sector and massive short covering. Take a look at these shares today.

Top Ships (TOPS) +132% today

Sino Global Shipping (SINO) +32% Today

Transocean Partners (RIGP) +11% Today

Below is a 90 day chart of Top Ships (TOPS) and you can see the combination of rotation and short covering fueled by acquisition fever.

In the merger, Transocean Partners common unitholders will receive 1.1427 Transocean shares for each Transocean Partners common unit. The Transocean Partners unit price implied by the exchange ratio represents a 15% premium to Transocean Partners` closing price on July 29, 2016. "We are excited about this merger, as it provides significant and immediate benefits to Transocean in the form of simplified administration and governance, tangible cost savings and improved liquidity," said Jeremy Thigpen, President and Chief Executive Officer of Transocean. "The contemplated all-equity transaction is entirely consistent with Transocean`s current liquidity objectives."

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