Cyprus-based dry bulk shipping specialist Castor Maritime (NASDAQ:CTRM) is obscure to many people, but a small group of thrill-seeking traders know CTRM stock quite well.
Since mid-2019, it has been classified as a penny stock, which is defined by the U.S. Securities and Exchange Commission as a stock that’s trading for less than $5.
There’s nothing wrong with that, as long as you understand the risks involved.
Low-priced assets tend to be prone to bouts of volatility, so please be cautious at all times with CTRM stock.
If you’re in the market to trade an aggressive fleet builder, however, then Castor Maritime might pique your interest and earn you (hopefully) some decent returns.
A Closer Look at CTRM Stock
Interestingly, CTRM stock wasn’t always a penny stock, technically speaking. In fact, at one point in 2019, the shares were trading at $6.40 apiece.
Even the most optimistic bulls should keep their near-term expectations muted. Castor Maritime shares probably won’t get back to their 2019 prices anytime soon.
For the time being, we can observe the sharp rally to $1.95 which occurred in February of this year. Just a few months prior, CTRM stock had been priced at less than 20 cents.
CTRM stock will open today around 45 cents. Could another run to the $2 level be in the cards?
It’s possible, and a major catalyst could be right around the corner – you just never know with Castor Maritime.
Tracking the Industry
If you’re going to invest in Castor Maritime, you’ll definitely want to keep a close watch on the dry bulk shipping industry.
As they say, a rising tide lifts all boats. If the industry is doing well overall, that’s good news for Castor Maritime.
Thankfully, there are experts with optimistic expectations for the dry bulk shipping market. Perhaps the world’s economic recovery from the Covid-19 pandemic can lift the industry’s sails.
Let’s put the puns aside for a moment and see what the experts have to say about it. Market Research Future expects the global dry bulk shipping market to expand at a compound annual growth rate (CAGR) of 5.1% from 2020 to 2027.
The contributing factors are expected to include:
- Rapid urbanization and strong economic growth
- Rise in demand for iron ore, coal and food grains
- Investments in infrastructure projects
- Emphasis on improving naval routes
- Developments in supply chain management systems
- Innovations for tracking and monitoring seaborne cargo
Rahul Sharan, lead research analyst at Drewry, offers up a different but nonetheless encouraging statistic.
In particular, Sharan expects the dry bulk market to recover in 2021, with shipping volumes expanding by 4.8% next year.
A Fast-Expanding Fleet
As you can see, the outlook is generally bullish on dry bulk shipping. Yet, how does Castor Maritime fit into the picture?
In this industry, the simplest way to measure a shipper’s worth is by examining its fleet. If the fleet’s no good, the proverbial ship will go down.
Fortunately, Castor Maritime’s fleet is impressive and growing quickly. A little while ago, I reported on the company’s flurry of fleet additions that took place during 2021’s first quarter.
Evidently, Castor Maritime isn’t slowing down its pace of acquisitions. Don’t worry – I won’t give you the bends with a full list of recent fleet additions.
Suffice it to say that Castor Maritime issued press releases about vessel acquisitions and/or deliveries six times in April, plus another one in early May.
The Bottom Line
There’s nothing safe or secure about investing in CTRM stock. This is a penny stock that’s capable of moving fast in both directions.
But you know what else is moving fast? Castor Maritime’s fleet growth – and if you’re ready to set sail with an ambitious dry bulk shipping company, this one’s worth a try.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.