Bear Of The Day: Eagle Bulk Shipping

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Trends do not last forever. Yes, we have all heard he old adage that “The trend is your friend.” Totally true, but you forgot about the second half of that phrase. “The trend is your friend…until it ends.” There were several new trends that popped up in our COVID-induced world. Among them were work from home, higher durable goods prices, real estate booms, and many others. One major trend was shipping prices going through the roof.

Today’s Bear of the Day was a stock that benefited from that trend, which has since ended. I’m talking about Zacks Rank #5 (Strong Sell) Eagle Bulk Shipping (EGLE) . Eagle Bulk Shipping Inc. engages in the ocean transportation of dry bulk cargoes worldwide. The company owns, charters, and operates dry bulk vessels that transport a range of bulk cargoes, including iron ore, coal, grains, fertilizers, steel products, petcoke, cement, and forest products. It serves miners, producers, traders, and end users. As of December 31, 2021, the company owned and operated a fleet of 53 vessels.

 

The fact of the matter is, next year is going to get bad. Current year EPS and sales estimates are just peachy. Current year sales growth is 14% and EPS growth is 38%. Now look to next year and the story is much different. Sales are set to contract by 26.97% while EPS is set to crater by 40.65%.

The shift in our Zacks Consensus Estimate is even more dramatic. Current year EPS estimates have shrunk from $18.25 to $16.92 while next year is off from $15.05 to $10.04. Those estimates are due to analysts dropping their numbers. That is the reason for the unfavorable Zacks Rank.

Investors looking for other stocks in the Transportation – Shipping industry which ranks in the Top 31% of our Zacks Industry Rank have a few other stocks to choose from. There are several Zacks Rank #1 (Strong Buy) stocks in this industry. They include Zacks Rank #1 (Strong Buy) Ardmore Shipping ASC and Euroseas ESEA.


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