The shipping industry—the backbone of global trade—was impacted severely by the COVID-19 pandemic. However, with a gradual economic recovery and an improving international supply chain, the industry has witnessed a quick rebound. But an established player in the sector, Castor Maritime (CTRM), is still reeling from the pandemic’s effects. So, we think investors looking to benefit from the industry’s recovery should instead bet on Nippon Yusen Kabushiki Kaisha (NPNYY), Costamare Inc . (NYSE:CMRE), and Danaos Corporation (NYSE:DAC) because they are fundamentally stronger.Even though the COVID-19 pandemic demand in the shipping industry last year, rising freight rates and improved transport activities have brought considerable improvement this year. With the resumption of global import and export activities, the shipping industry should see a substantial increase in demand. The industry is enjoying favorable investor sentiment too, as evidenced by Breakwave Dry Bulk Shipping ETF’s (BDRY) 255.5% returns over the past year compared to SPDR S&P 500’s (SPY) 14.8% gains. Also, the Global Cargo Shipping Market is expected to grow at a 3.1% CAGR over the next four years to hit $14.20 billion in 2025.
While several companies in the industry have regained substantial momentum, Castor Maritime Inc. (CTRM) has lagged behind. Shares of CTRM have declined 18.9% over the past year. Also, in its last reported quarter, the company has reported a $1.75 million net loss and a $0.03 per share loss.
Conversely, Nippon Yusen Kabushiki Kaisha (NPNYY), Costamare Inc. (CMRE), and Danaos Corporation (DAC) are fundamentally sound stocks in the sector. These stocks are well positioned to capitalize on the industry’s rebound, and we think it could be wise to invest in them now.