2 Shipping Stocks Likely To Beat Earnings Estimates In Q3

The waning impact of cheap oil is also not favorable for transportation companies and shipping stocks are no exception. The tough times are evidenced by the fact that we currently have only one shipping stock – KNOT Offshore Partners LP (KNOP) – sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The upsurge (2016 Zacks Consensus Estimate has climbed 14 cents over the last seven days) followed the company’s bottom-line outperformance in the third quarter of 2016. The company delivered a positive earnings surprise of 15.56% on Nov 2.

Some Outperformers Still Left

While most transportation companies (including the entire S&P 500 fraternity) have already reported their quarterly numbers, there are a handful companies that are yet to report third-quarter financials. However, the transportation sector is highly diversified and includes airline companies, truckers and railroads to name a few. Hence, it is by no means an easy task to pinpoint potential outperformers. This is where our proprietary methodology comes in handy. It advises investors to look for stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.

Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
  
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 An earnings beat more often than not boosts investor confidence in the stocks, which translates into rapid price appreciation. Consequently, adding such stocks to your portfolio is undoubtedly prudent.

2 Attractive Shipping Stocks

With the aid of the above methodology, we present two shipping stocks that are expected to outshine earnings estimates in the third quarter.
Navios Maritime Holdings Inc. (NM - Free Report) operates as a seaborne shipping and logistics company which focuses on transportation and shipment of dry bulk commodities including iron ore, coal, and grains. The company will likely release third-quarter results on Nov 28. We expect Navios Maritime to surpass expectations as it has an Earnings ESP of +16.00% and a Zacks Rank #2.

Golden Ocean Group Limited (GOGL - Free Report) , based in Hamilton, Bermuda, focuses on the transportation of bulk commodities. The company is scheduled to release third-quarter results on Nov 22. We expect Golden Ocean Group Limited to surpass expectations as it has an Earnings ESP of +28.13% and a Zacks Rank #3.

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