No. of Recommendations: 1
1. What do you know about container shipping?
or
What's the difference between say, container shipping company Danaos Corporation (DAC) and ZIM?
2. ZIM is involved in spot trading
a. what % of its fleet?
b. is this good or bad?
3. How has the container shipping market been trending more recently vs the first half of 2022?
Even knowing the answers to the above, have a bloodied ZIM stake
Answer to #1, very. little. But looking quickly, recent high prices have sent ZIM from losing money to making a ton of money, i.e more net income in the last 2 quarters ($2.5b) than their entire market cap ($2.1b). Obviously, their fortunes are closely tied to current shipping rates, which have been very high in the last year or so but are now plunging back close to levels of a few years ago. Danaos (DAC), on the other hand, has long term deals in place, with average charter duration of 3.5 years at the end of last quarter. Interestingly, DAC was a substantial shareholder of ZIM, and sold everything last quarter.
Answer to #2, I don't know, must be pretty high. Can you suggest where this kind of info can be found, comparing different operators? I haven't been able to find it in ZIM's reports. Obviously, high reliance on spot trading is great when prices are good, and it's terrible when prices are bad.
Answer to #3: rates are trending heavily down, and will obviously not be helped if the world falls into a recession.
All this said, if ZIM can generate even a few more quarters close to the last few, and if they keep paying out half of their net income in dividends, at a market cap of $2b, it wouldn't take long for a bet on ZIM to work out nicely. Seems like a nice call option on the possibility of the world not going to hell fast.
drb
