Star Bulk Carriers Sees More Interest from Institutional Investors
Institutional investors were bullish on Star Bulk Carriers in 2Q15
This series will cover how institutional investors have played dry bulkers with a specific focus on Star Bulk Carriers (SBLK). Aggregate institutional investor filings from 2Q15 revealed that the vast majority of asset managers turned bullish on dry bulkers such as Star Bulk Carriers (SBLK), Scorpio Bulker (SALT), Diana Shipping (DSX), and Golden Ocean Group (GOGL), while being net bearish on dry bulkers such as DryShips (DRYS) and Navios Maritime Holdings (NM).
While oil tankers such as Nordic American Tankers (NAT) have delivered stellar returns this year, dry bulkers have had a rough year thus far in 2015 as weak Chinese demand for commodities, specifically coal, and overcapacity in the market have negatively affected their performance.
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Most dry bulk operators have experienced share price declines in the double-digit range. Star Bulk and DryShips have lost almost 60% in value this year, while Golden Ocean Group, Navios Maritime, Scorpio Bulkers, and Diana Shipping have lost 36.20%, 33.58%, 17.77%, and 4.77%, respectively. The chart above captures the last one-year performance of global maritime players.
Star Bulk saw additions or new positions from 33 institutional investors in 2Q15 as against position decreases or liquidations from 15 asset management companies. Overall shares held by institutional investors in SBLK rose by ~67 million during the last quarter to 170 million.
Maritime companies such as dry bulkers fall under the transportation sector, which includes other industries such as railroads, trucking, airlines, and courier service providers. The sector on the whole has been affected by weakening volumes across sub-industries and macro headwinds with the Dow Jones Transportation Average falling by 14.62% year-to-date. The iShares Transportation Average ETF (IYT) tries to replicate the performance of the Dow Jones Transportation Average Index. It has a portfolio weight of 5% for shipping companies. Investors who want access to the shipping industry could consider the Guggenheim Shipping ETF (SEA). GOGL and NM form 4.68% and 1.88% of the ETF.