The Baltic Dry Index
is a measure for what it costs to transport by sea. When
it's down, shipping stocks are down. The index peaked in May
2008 at an all-time high of 11,793. From May to December
2008, it dropped more than -90% to 663, a low not seen in
more than two decades. Today, it's in the middle of a
Having already tripled off its low, there's still plenty of
room for the Baltic Dry to make gains. Its average price
over the past ten years is 3225,
+55% higher than it stands
today. And in the recent past, it's been as high as 11,000,
more than five times today's number.
Despite being able
to charge much more for their services, shipper's stocks are
still near their December prices. But
don't think these stocks are sunk. They'll be back.
This is because the the Baltic Dry
indicates what shippers are actually charging, which
directly affects their bottom line. As
the Baltic Dry Index raises to its historical level,
will shortly follow suit.
Although there's a
fair amount of slippage due to the Baltic Dry being a
leading indicator and the particular situation of individual
stocks, this index and shippers move together.
While the yields on many of these
companies are near their historical highs and their share
prices are near there historic lows, some caution is
necessary. Several shippers
have cut their dividends. Others have even stopped paying
But there's one shipper that's a real standout right now.
It's trades at its book value, has a 21.1% yield, and has a
potential of a 117% capital gain -- if it were only to
return to its average price over the past several years.
Carla Pasternak, editor of
recently found this shipper, and it's showing no sign of
letting up. Beyond having paid regular dividends like
clockwork for 18 quarters, her "Stock of the Month" actually
raised it in 10 of them. To find out more about this
Global Dividend Opportunities
839-K Quince Orchard Blvd.
Gaithersburg, MD 20878-1614
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