After Gaining 73% in the Past 12 Months, Wilh. Wilhelmsen is Still a “Buy”

Wilh. Wilhelmsen ASA, the world’s largest vehicle transporter, extended gains in Oslo as Pareto Securities recommended investors buy the stock as limited supply and growing demand boosts the company’s earnings prospects.

Shares in the company, based in Lysaker near Oslo, gained 0.5 percent to 53.25 kroner, outperforming the Bloomberg European Transportation Index, which declined as much as 2.8 percent, the most in more than seven months. Wilhelmsen on Jan. 11 climbed to an intraday high of 53.75 kroner.

The company, which operates about 23 percent of the global vehicle shipping fleet, is likely to benefit amid improving prospects in the auto and high and heavy markets, Pareto said in an e-mailed note to clients today. “There is very limited supply entering the market in the next couple of years and longer term prospects are positive,” said the broker, which has a buy rating on the stock.

Earnings for ships that haul liquefied gases, cars and oil products are most likely to recover after a slump in rates brought about the global financial crisis, Arctic Securities ASA said in a report on Jan. 2.

Gas, auto and oil-product carriers are “niche” areas of the shipping industry that will benefit from conditions including barriers to entry, the Norwegian investment bank said. Wilhelmsen and Golar LNG Ltd., which operates a fleet of gas ships, are two of Arctic’s top stock picks this year, it said.

Shares in Wilhelmsen have gained 73 percent during the last 12 months, giving it a market value of 11.7 billion kroner ($2.1 billion.) The stock traded at 53.25 kroner as of 11:15 a.m. in the Norwegian capital.

– Stephen Treloar, Copyright 2013 Bloomberg.