3 Stocks to Invest in the Flourishing Shipping Industry

The Zacks Transportation - Shipping industry is benefiting from increased technological adoption to improve efficiency. The emergence of investment in new shipping corridors, driven by companies' supply-chain diversification mainly due to the U.S.-China tariff dispute, is a welcome development in the space. Low fuel costs are also supporting bottom-line growth.
 
Despite geopolitical and macroeconomic woes, industry players like Global Ship Lease GSL, Pangaea Logistics Solutions PANL and Seanergy Maritime Holdings SHIP are well-poised to gain from business streamlining efforts.

Industry Overview

The companies belonging to the Zacks Transportation - Shipping industry, which is cyclical in nature, offer liquefied natural gas and crude oil marine transportation services under long-term, fixed-rate contracts with energy and utility bigwigs. Most participants focus on the seaborne transportation of crude oil and other oil products globally. The industry also includes players that own, operate and manage liquefied natural gas carriers. Some participants are owners and operators of containerships for charter. The change in the e-commerce landscape due to the coronavirus impact implies that shippers are relying more on third-party logistics providers. The well-being of the industry participants is directly proportional to the health of the economy. The resumption of economic activities after coming to a standstill during COVID-19 bodes well for the industry.

 

4 Shipping Industry Trends in Focus

Increased Technological Adoption: A positive: Increased technological adoption and the integration of AI are transforming the shipping industry by streamlining operations, improving decision-making and reducing costs. AI-powered systems help shipping companies optimize routes, predict maintenance needs and enhance fuel efficiency through real-time data analysis. Automation and smart sensors make it possible to monitor the performance of vessels more accurately, reducing delays and preventing costly equipment failures. Advanced analytics also support better demand forecasting and inventory management, strengthening supply-chain reliability.

Strong LNG Market: Upbeat demand for liquefied natural gas (“LNG”) represents a huge positive for shipping stocks. The elevated levels of inflation raised oil and natural gas prices. Moreover, amid the prolonged Russia-Ukraine war, Europe is likely to seek gas supplies outside Russia. This is expected to drive demand for LNG vessels.

Elevated Expenses to Hurt the Bottom Line: Regulations to enhance transparency have increased compliance costs for shipping companies for quite some time. Also, as industry players are constantly trying to upgrade technology to keep up with evolving customer needs, technology-related costs are expected to keep rising. Using AI and machine learning to enhance operational efficiencies may lead to increased expenses in the short term, but will ultimately support investment managers' operating margins in the long run.

Low Oil Prices Bode Well: The southward movement of oil prices bodes well for the bottom-line growth of the industry participants. This is because fuel expenses are a significant input cost for any transportation company. Crude oil has been struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence, and production increase by OPEC+ have all contributed to this downward pressure. Oil prices fell 4.2% during the July–September period, supporting margin expansion for industry participants. Oil tanker companies are the biggest beneficiaries of the oil price decline. Lower oil prices typically point to increased sales volume of oil. Tanker prices generally rise as buyers seek to move that volume. 

Zacks Industry Rank Indicates Upbeat Prospects

The Zacks Transportation - Shipping industry lies within the broader Zacks  Transportation sector. The industry currently carries a Zacks Industry Rank #53, which places it in 22% of 243 Zacks industries.

The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates sunny near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth. As a matter of fact, the industry’s earnings estimate for 2025 has gone up 1.5% since July.

Before we present a few stocks that you may want to add to your portfolio, let’s look at the industry’s recent stock-market performance and its valuation picture.

Industry Outperforms Sector but Underperforms S&P 500

The Zacks Transportation - Shipping industry has lagged the Zacks S&P 500 composite index, but outperformed the broader sector over the past year.

Over this period, the industry has gained 7.2% compared with the S&P 500 index’s northward movement of 16.3%. The broader sector has moved 10.7% south in the same timeframe.

One-Year Price Performance

 

Industry's Current Valuation

Based on the forward 12-month price-to-earnings (P/E- F12M), a commonly used multiple for valuing shipping stocks, the industry is currently trading at 10.91X, compared with the S&P 500’s 23.57X. It is also below the sector’s P/E (F12) reading of 13.26X.

Over the past five years, the industry has traded as high as 11.12X, as low as 3.88X and at the median of 5.92X.

P/E Ratio (Forward 12-Month)

 

3 Transportation-Shipping Stocks to Buy Now

Pangaea Logistics provides seaborne dry bulk transportation services. The company also offers logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone.

Pangaea Logistics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for 2025 earnings reflects a massive year over year increase of in excess of 600% on a year-over-year basis.

  You can see  the complete list of today’s Zacks #1 Rank stocks here.   

Price and Consensus: PANL

Seanergy Maritime, a dry bulk shipping company, is benefiting from the positive sentiment surrounding the Capesize market. Its shareholder-friendly approach bodes well for the company.

SHIP currently flaunts a Zacks Rank #1. The shipping company has outpaced the Zacks Consensus Estimate for earnings in each of the past four quarters. The average beat is 76.4%.

Price and Consensus: SHIP

Global Ship Lease is a leading owner of containerships with a diversified fleet of mid-sized and smaller containerships. The company currently carries a Zacks Rank #2 (Buy).

The stock has gained 40% over the past six months. The Zacks Consensus Estimate for 2025 earnings has increased 3.3% over the past 60 days.

 

Price and Consensus: GSL

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Global Ship Lease, Inc. (GSL): Free Stock Analysis Report
 
Seanergy Maritime Holdings Corp (SHIP): Free Stock Analysis Report
 
Pangaea Logistics Solutions Ltd. (PANL): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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