Have Shipping Stocks Gotten Way Ahead of Themselves Since the Election?

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November 16, 2016

The DryShips-owned MV Rapallo. Photo: MarineTraffic/Malcom Millar

By Julie Verhage

(Bloomberg) — A 1,500 percent stock surge since Nov. 8? It’s possible in Trump’s America.

DryShips Inc., which owns tankers that carry iron ore, coal and other commodities, is becoming a poster child for stocks that have seen massive gains following Donald Trump’s surprise victory in the U.S. presidential election. The company’s not alone, however, as a number of other shipping stocks have been propelled higher in the days since the vote result.

“If there is a stock chart that reflects that maybe markets have gotten a bit ahead of itself with its optimism over a Trump economic revolution happening quickly, look at DryShips over the past few days,” Peter Boockvar, chief market analyst at The Lindsey Group LLC, writes. “It closed at $4.56 one week ago and closed at $73 yesterday. What a massive short squeeze.”

Earlier: U.S. Shipping Stocks Enjoying Trump Win

Shares of DryShips were also boosted after it reported third-quarter results and following a more than 20 percent gain in the Baltic Dry Index, a benchmark for shipping rates.

Other companies that have followed DryShip’s suit include Top Ships Inc., Eagle Bulk Shipping Inc., and Seanergy Maritime Holdings Corp., all of which are up more than 100 percent.

Tim Sykes, who runs an education business teaching followers and subscribers how they can profit from trading penny stocks, said that there are a number of other equities that he is keeping a close eye on. Among them is Sino-Global Shipping America Ltd., Globus Maritime Ltd., Diana Containerships Inc., and Euroseas Ltd., which have all gained more than 110 percent since the election.

Sykes doesn’t believe this can last much longer, adding that most of these plays have “one to two days max” before they run out of steam.

“DryShips will get crushed 50 percent or more,” he said.

See Also: Shipping Stocks Are the Latest Logic-Defying Trump Rally

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