Three equity analysts walk into a bar
Familiar shipping analysts topped the ranks of this year’s Institutional Investor magazine
IT is a good time to celebrate the achievements of shipping equity analysts, an overworked and underappreciated bunch of Wall Street geeks. Who claimed this year’s awards and what are their current picks?
This week saw the results for the 2017 Institutional Investor All-America Research Team. The publication ranks equity research analysts as surveyed by institutional investors. Each institutional investor’s vote is weighted based on assets under management, which means the bigger the fish the louder the voice.
We understand that there was a total of 24 shipping analysts ranked in this year’s survey, and that includes only analysts/firms based in the US. Keep that number in mind next time you read an analyst’s report talking about yard overcapacity.
The top three shipping analysts were Michael Webber of Wells Fargo, who has won top billing for the third year in a row, Jonathan Chappell of Evercore, and Fotis Giannakoulis of Morgan Stanley.
The same analysts had claimed the top three spots the year before, except that Mr Giannakoulis had placed second.
The three runners-up were Amit Mehrotra of Deutsche Bank, Ken Hoexter of Bank of America and Spiro Dounis of UBS. All three runners-up made great strides from last year and leapfrogged some heavy-hitting industry veterans, whose names shall not be disclosed lest they stop sending us their research notes.
Golar LNG (news, data), which made news on Thursday with the highly anticipated sailing of FLNG Hilli Episeyo from Singapore to Cameroon to claim its spot as a floating liquefaction terminal, is the consensus stock pick of all top three analysts. But beyond Golar, their appetites differ.
Mr Webber likes GasLog Partners (news, data) and Teekay LNG Partners (news, data) from the LNG sector and Costamare (news, data) from the container sector. He still avoids the broader dry bulk sector even if that makes him an exception. In his own words, it’s “definitely fun to be the outlier, especially when we have got a high degree of conviction we are right”.
In addition to Golar LNG, Mr Chappell likes two product tanker owners, Scorpio Tankers (news, data) and Ardmore Shipping, and Scorpio Bulkers (news, data) from the dry cargo sector. Never shy to voice a contrarian view, Mr Chappell also recommends shorting Nordic American Tankers (news, data).
Mr Gianakoulis’ favorite stocks are more diverse. Among his buy ratings we noticed Golar LNG, GasLog, GasLog Partners and Hoegh LNG Partners from the broader LNG/FSRU sector. We also noticed several dry cargo owners (namely Star Bulk (news, data), Safe Bulkers (news, data), and Golden Ocean), one tanker owner being Tsakos Energy Navigation, and one containership owner being Costamare.
Will their picks help them win again in 2018? Or will some other analyst emerge to unseat the status quo? It is a new year, a new contest and the clock is ticking.