Baltic Dry Index (BDI) could rebound to 4,000 by the end of 2009.
Dry bulk shipping stock were up across the board on Tuesday as the sector's benchmark ticked higher. In September, Cosco Shipping researcher Kong Fanhua said the sector's benchmark Baltic Dry Index (BDI) could rebound to 4,000 by the end of 2009. With a current value of 2,766, the Index is far from this goal, but it has rallied by more than 25% since the September 29 recommendation.
The BDI is now trading at levels unseen since August, and shipping stocks are surging higher. The sector remains mixed over the last month, but if the BDI rally continues there could be more upside to come.
As a whole, the Dry Bulk Shipping Stocks Index is ahead by 1.5%. It is trailing the S&P 500 by -5% in the last month.
Eagle Bulk Shipping, Genco Shipping & Trading, and Omega Navigation Enterprises are leading today's run with gains of 4% or more.
Kirby and A/S Steamship, two of the sector's largest U.S.-listed plays by market cap, are not participating in the dry bulk rally. Both stocks are down fractionally, but remain top performers over the last week.
Meanwhile, DryShips, Diana Shipping, and Excel Maritime Carriers are all ahead by more than 1.5%.
As of this writing, the Dry Bulk Shipping Stocks Index is one of the 20 cheapest tickerspy Indexes by P/E ratio with an average multiple of just 13x. It is also among the highest yielding sectors, with an average dividend of 2.3%.