Zacks Investment Ideas feature highlights: StealthGas, Nordic American Tanker and Cliffs Natural Resources
CHICAGO, Nov. 7, 2014 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: StealthGas (Nasdaq:GASS-Free Report), Nordic American Tanker (NYSE:NAT-Free Report) and Cliffs Natural Resources (NYSE:CLF-Free Report).
Gales of November Came Early
Monday, November 10, 2014 will be the 39th anniversary of the sinking of the Edmund Fitzgerald. Twenty nine souls went down with the ship that was headed for Cleveland (according to the song) and later immortalized by the Gordon Lightfoot song "Wreck of The Edmund Fitzgerald." The gales of November seem to be coming early this year so let's take a look at some shippers and of course pay our respects to one of the worst shipping disasters on the Great Lakes.
Most shippers are not found on the big lake they call "Gitche Gumee" but rather they sail the high seas. With the price of crude falling, the costs for these mega tankers are coming down as well. That could help several international shipper post better than expected earnings in the coming quarter.
Greek Shipping
StealthGas (Nasdaq:GASS-Free Report) vessels carry various petroleum and petrochemical gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of oil and natural gas. While oil prices have been falling, natural gas prices have been rising.
As a Zacks Rank #1 (Strong Buy) GASS is stock that could be worth a deeper look if you want some shipping exposure in your portfolio. While current quarter estimates have slipped of late, next year's Zacks Consensus Estimate has ticked higher. Most investors are looking more towards 2015 numbers at this point, but still keep an eye on any earnings event. GASS is slated to report on November 26.
Closer to Home
Another shipper that really fits in with this story line is Nordic American Tanker (NYSE:NAT-Free Report). I held this stock in the Home Run Investor service, so I did plenty of research on the name. My timing on the buy could have been better, and as a result it was removed from the portfolio in short order. I have kept my eye on this stock since, looking for a rebound. The stock is currently a Zacks Rank #2 (Buy) and has also seen estimates for 2015 move higher of late.
The reason this stock fits in nicely with my story line is that it is expected to release earnings on November 10. Let's hope for NAT that the date will not be an albatross around its neck.
The Gales Came Super Early
The Gales of November can cause a ship to sink when they come early, but how about if they come as early as late October? I am not even talking about the snow we saw in Chicago for Halloween, I am referring the cold winds that were felt on an earnings conference call held on October 28. That most certainly is a early Gale of November!
Cliffs Natural Resources (NYSE:CLF-Free Report) is a Zacks Rank #3 (Hold) even after it recently crushed the Zacks Consensus Estimate. The company reported earnings of $0.21 and beat the Zacks Consensus Estimate by $0.16 for a 320% positive earnings surprise. The company beat the top line number as well, breaking a streak of two quarters where revenue came in below the Zacks Consensus Estimate. As a result the stock moved higher by 17% in the session following the release.
Some might think that the fact that CLF "blew" away earnings is the reason that it fits in the story. It is, but that is not the biggest reason why I am highlighting this stock. The real gale force winds came on the conference call.
Lourenco Goncalves is relatively new to the job of CEO of CLF, but that didn't stop him from being "bold" on the call. When asked if he "had any idea" about specific costs, the CEO replied, no I know exactly what it costs but I am not going to tell you. Such brash statements are quite refreshing in a world that has become very politically correct. Instead of dancing around the question, Goncalves being the straight shooter he is, hit the bulls-eye.
But that wasn't it. One analyst, who had a $4 target price on the stock asked a question that went unanswered. The stormy CEO told the analyst that "you know everything about my company, so I am not going to answer your question." Does it get any better than that? I don't think so.
Sometimes you bet on the horses, sometimes you bet on the jockey. I don't have to tell you which part of the race I will be following from now on!
The Final Shipment
When the Edmund Fitzgerlad sunk 39 years ago, she was carrying iron ore to Cleveland. CLF, based in Cleveland Ohio is in the business of iron ore production and metallurgical coal. Coincidence? Not at all.
Having sent no distress signal, the sinking of the Edmund Fitzgerald perplexed many and even drew the marine explorer Jean-Michel Cousteau, son of Jacques Cousteau to investigate the wreck. They concluded that the ship probably broke apart at the surface.
29 brave men lost their lives on November 10, 1975. Mark Thomas of Richmond Heights, Ohio was the youngest to perish at the age of 21 while Captain Ernest McSorley at 63 was the oldest. John McCarthy of Bay Village, Ohio (my hometown) the First Mate was second oldest at 62.
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