Shipping rates for supertankers are on the rise, largely due to increased fuel demand from China. That increase is causing analysts to predict a rise in the daily shipping rate to $100,000 by December of this year. It's good for the shippers - and maybe for China, too - but it might be a tad inflationary for the average consumer at the gas pump going forward.

IN PICTURES: What Is Your Risk Tolerance?

For investors, it clearly means opportunity. The shipping business is on the mend, and below we list three stocks whose fortunes are proving that fact. Note, too, that it's more than just price appreciation that makes these companies attractive. They also boast some spectacular fundamentals.

Adding to the Wardrobe
Knightsbridge Tankers Limited (Nasdaq:VLCCF) has a market cap of over $320 million and trades with an annual dividend yield of 8.5%. Better than this, however, is the stock's performance; year-to-date, Knightsbridge shares have climbed more than 40%. That beats the iShares Dow Jones Transportation Average ETF (NYSE:IYT) by a long shot. The transports are up less than 5% since the year began, and the broad market, as measured by the SPDR S&P 500 ETF (NYSE:SPY), is down nearly 2%.

Knightsbridge operates a fleet of dry bulk and crude oil carriers and is headquartered in Bermuda. The stock's P/E ratio is 12.2 and price-to-book is just 1.27. L4

In June, VLCCF added another capesize vessel, the Golden Future, to its fleet at a cost of $72 million.

Strong Five-Year Growth Trend
Seaspan Corporation's (NYSE:SSW) sales figures have grown at a rate of 51% for the last five years and EPS growth comes in at 56% for that period. Yet the stock still offers an ample 4.8% dividend yield and trades with a P/E of 18.5. Moreover, the shares are on offer at just a fraction of the company's breakup value. Price-to-book is a meager 0.69.

Seaspan owns and operates a fleet of 42 containerships and has contracts to purchase another 21 and lease five more. The company is domiciled in Hong Kong. Year-to-date the shares are up 14.5% and for the full year an impressive 70%.

Comparatively, Teekay Corporation (NYSE:TK) stock has risen by over 13% since the year began and by 47% for the full year. The stock pays a 4.9% dividend and trades with a P/E of 15.1.

The Bottom Line
Hop on the next oceangoing transport to wealth and riches. The above three issues offer great recent momentum and a nice yield kicker, to boot. (Despite some disappointing trucking trends, there is still a lot of opportunity in the industry. For more stock analysis, see The Upside Of Trucking.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  2. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  3. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  4. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  5. Mutual Funds & ETFs

    Buying Vanguard Mutual Funds Vs. ETFs

    Learn about the differences between Vanguard's mutual fund and ETF products, and discover which may be more appropriate for investors.
  6. Mutual Funds & ETFs

    ETFs Vs. Mutual Funds: Choosing For Your Retirement

    Learn about the difference between using mutual funds versus ETFs for retirement, including which investment strategies and goals are best served by each.
  7. Mutual Funds & ETFs

    How to Reinvest Dividends from ETFs

    Learn about reinvesting ETF dividends, including the benefits and drawbacks of dividend reinvestment plans (DRIPs) and manual reinvestment.
  8. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  9. Mutual Funds & ETFs

    Best 3 Vanguard Funds that Track the Top 500 Companies

    Discover the three Vanguard funds tracking the S&P 500 Index, and learn about the characteristics and historical statistics of these funds.
  10. Forex Fundamentals

    How to Buy Chinese Yuan

    Discover the different options that are available to investors who want to obtain exposure to the Chinese yuan, including ETFs and ETNs.
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>

You May Also Like

Trading Center