Based in Cyprus, Castor Maritime (NASDAQ:CTRM) is a global shipping company that specializes in the the seaborne transportation of dry-bulk vessels. What’s more, much like the ships themselves, CTRM stock can move far and earn investors a sizable profit.
Of course, the stock can also induce a capital loss, if you can’t handle some volatility. Low-priced shipping stocks are known to thrash around sometimes, so be prepared for that if you’re going to take a position in Castor Maritime.
However, there is money to made here. Back in March, I suggested that traders should target $2 for CTRM stock. That plan worked out perfectly as the stock sliced through $2 in May like a hot knife through butter.
Now, it’s time to sail this penny stock to new horizons. And some recent developments this summer — including an influx of capital — should set Castor Maritime’s stakeholders on the right course.
CTRM Stock at a Glance
When I said that $2 was a reasonable objective in March, I was leveraging the magic of support and resistance levels.
More precisely, it’s not magic, but logic. The buyers had pushed CTRM stock as high as $1.95 on Feb. 11. So, after a share-price pullback, $2 was a likely target for the next rally.
Some folks might consider the possibility that Reddit traders contributed to the run-up in late May and early June. During that time, Castor Maritime shares sailed to a 52-week high of $4.10.
It was a massive vertical price move, so a retracement was almost inevitable. After all, stocks don’t just keep going up forever. Profit-taking is bound to happen.
By early August, CTRM stock was moving back towards the $2 area. However, this wasn’t a flash crash, but more of a calm drift towards that level.
Sure, we could look to $4 for the next move. Reddit traders could probably move the stock there if they made a concerted effort. However, there’s a principle to keep in mind here: greed is bad for your financial health. Therefore, it’s not a bad idea to aim for $3 before setting sights on a more ambitious price target.
New Vessel Deliveries and Fresh Financing
One thing that cannot be denied about Castor Maritime, though, is that this company is in growth mode.
Back in March, I observed that the company had significantly expanded its fleet. More recently, though, Castor Maritime has maintained a rapid pace of expansion:
- On Jun. 7, it took delivery of the M/V Magic Eclipse, “a 2011 Japanese-built Panamax dry bulk vessel”
- On Jun. 15, Castor received the M/T Wonder Musica, a 2004 Korean-built Aframax/LR2 tanker (financed in its entirety with cash on hand)
- On Jun 17, it acquired the M/V Magic Rainbow, a 2007 Panamax dry bulk carrier
- Finally, on Jun. 22, Castor finalized its acquisition of the M/T Wonder Formosa,
“a 2006 Korean-built MR1 tanker”(fully financed with cash on hand)
All together, we can view these vessel acquisitions as a positive sign as Castor Maritime expands its industry presence.
At the same time, CTRM stock investors should also be glad to learn that the company has, in the words of CEO Petros Panagiotidis, announced the closing of “significant new financing.”
More specifically, Castor announced “the closing and drawdown of a $40.75 million senior term loan facility with a European bank […] through four of its dry bulk vessel shipowning entities.” The company plans to use the net proceeds from the nearly $41 million for general corporate purposes, which will include supporting its growth plans.
“We believe that by increasing our low leverage position, we are improving our capital structure and enhancing our ability to fund our growth plans,” commented Panagiotidis.
The Takeaway on CTRM Stock
There’s no denying that CTRM stock is a fast mover. It’s not the type of stock that should take up a massive position in your portfolio.
However, Castor Maritime could be worthy of a moderately sized allocation. It’s clearly set to grow.
And, with the company continuing to expand quickly, a $3 share-price objective is really not unreasonable at all.
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On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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