Sunday Spectacle CXXXII

Shipping Investors Head for the Exits


(source: stockcharts.com)

This is an example of the ugly problem of over-capacity, although weak demand and pricing doesn't help matters either. There were way too many ships built, or contracted to be built, during the commodities/world-trade bubble. Barring a huge boom in trade or increases in pricing, particularly for dry bulk shipping and crude oil shipping, some of these companies may not make it.

The Philadelphia Marine Shipping Index (SHX) tracks the share prices of publicly-traded companies in America. Many shares are trading at around half of book value; however, they may still not be cheap enough since some may liquidate and not get much for their ships.

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