Genco Shipping and Trading
When you start looking at dry bulk shipping stocks like Genco Shipping and Trading (GNK) that have market caps under $250 million, you’ve got to be willing to take on additional risk for the potential breakout returns.
Like most small shipping companies, GNK is cash-strapped and has been pummeled by dirt-cheap charter rates; it’s also struggling with a debt load more than seven times its market cap.
But sometimes the smaller dogs have the bigger fight — and that’s part of the proposition with GNK. The company has pared back costs in recent years and is lean, mean and agile. The bulk of its more than 50-vessel fleet is leased on short-term charters, enabling it to take full advantage of rising charter rates. If the Baltic Dry Index continues to soar, GNK could be a winner.
Nevertheless, this is a “mad money” bet — and the volatility can’t be overstated. Genco has risen and fallen in huge chunks at various points of this week alone.