Stocks Under $10: How Overvalued Is the Shipping Industry?

Richard Suttmeier |

Stocks Under $10: How Overvalued Is the Shipping Industry?At www.ValuEngine.com we show that the Transportation sector 23.7% overvalued with the Air Freight industry 16.9% overvalued and the Shipping industry 23.1% overvalued. All 15 stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots.

ANW – was a $48 stock in October 2007 - has been below $10 since the week of February 12, 2011.
CPLP– was a $31 stock in August 2007 - has been below $10 since the week of May 28, 2011.
DCIX – has been below $10 since the week of June 11, 2011.
DRYS – was a $126 stock in November 2007 - has been below $10 since the week of May 16, 2009.
FRO – was a $72 stock in June 2008 - has been below $10 since the week of August 13, 2011.
GSL – has been below $8.05 for at least five years.
NAT – was a $44 stock in July 2007 - has been $10 since the week of October 13, 2012.
PRGN– was a $270 stock in November 2007 - has been below $10 since the week of Nov 12, 2011.
RLOG – has been below $9.25 for at least five years.
SB – has been below $10 since the week of October 11, 2008.
SBLK – was a $220 stock in November 2007 - has been below $10 since the week of July 28, 2012.
TEU – has been below $10 since the week of December 24, 2011.
TNK – has been below $10 since the week of May 21, 2011.
TNP– was a $39 stock in May 2008 - has been below $10 since the week of July 16, 2011.
VLCCF – was a $35 stock in may 2008 - has been below $10 since the week of June 9, 2012.

Stocks Under $10: How Overvalued Is the Shipping Industry?(Click to Enlarge)

Reading the Table

OV / UN Valued – The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. The most undervalued stock is SBLK by 69.5%. The most overvalued stock is VLCCF by 210.1%.

VE Rating – A “1-Engine” rating is a Strong Sell, a “2-Engine” rating is a Sell, a “3-Engine” rating is a Hold, a “4-Engine” rating is a Buy and a “5-Engine” rating is a Strong Buy. We have one Strong Buy rated stock (RLOG), two Hold rated stocks, eight Sell Rated stocks four Strong Sell rated stocks.

Last 12-Month Return (%) – Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage over the past twelve months! The biggest gainer over the last twelve months is GSL up 22.1%. The biggest loser was FRO down by 65.9%.

Forecast 1-Year Return – Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. RLOG is expected to gain 14.0% over the next twelve months while the others are projected to gain 0.2% to a loss between 3.6% and 37.0% over the next twelve months.

P/E Ratios – The twelve month trailing P/E ratios – GSL, SB & TEU have single-digit P/E ratios.

Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.

Pivot: A level between a value level and risky level that acts as a magnet during the time frame noted.

Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.

Where to Buy and Where to Sell

A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A "Pivot" is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon.  These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.

Buy and Trade Guidelines

Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ANW Aegean Marine Petroleum Network Inc. 9.93 -0.43 -4.15 358,784
CPLP Capital Product Partners L.P. 3.25 -0.06 -1.81 550,741
DCIX Diana Containerships Inc. 3.42 0.01 0.29 45,591
DRYS DryShips Inc. 0.44 -0.03 -5.64 563,015
FRO Frontline Ltd 7.05 -0.04 -0.56 760,241
GSL Global Ship Lease Inc New Class A 1.63 -0.06 -3.55 39,165
IIJI Internet Initiative Japan Inc. 9.24 -0.06 -0.66 1,987
NAT Nordic American Tankers Limited 9.98 -0.70 -6.55 8,718,949
PRGN Paragon Shipping Inc n/a n/a n/a 0
RLOG Rand Logistics Inc. 0.77 -0.03 -3.75 12,694
SB Safe Bulkers 1.53 -0.01 -0.65 102,957
SBLK Star Bulk Carriers Corp. 4.63 -0.20 -4.14 305,137
TEU null n/a n/a n/a 0
TNK Teekay Tankers Ltd. 2.45 -0.04 -1.61 1,613,835
TNP Tsakos Energy Navigation Ltd 4.77 -0.09 -1.85 661,220

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