Golden Ocean Group - bryanseiler.com

Stock: GOLG

Rating: Strong Buy

Author: Waleed M. Tariq

Bermuda-based Norwegian shipping business Golden Ocean Group. The company runs dry bulk ships that transport ore, coal, and grain.
The company’s 100 vessels can carry approximately 12,000,000 DWT.
Their broad fleet enables flexibility. On December 12, the company was worth $1.7 billion.

GOGL will benefit on the burgeoning marine shipping business.
As the global economy recovers, demand is expected to rise.
Following a positive business environment, the company’s earnings growth is predicted to accelerate.

The corporation may become bearish if the rate of ship growth slows in the coming years.

There are various explanations for the current rise in dry bulk freight.
Few ships-August 2021 predictions say new boats will add 53.9m DWT to global bulk transport. This is substantially lower than 2020’s 71.6m DWT and 2019’s 97.8m DWT.
Supply Chain-Supply chain concerns have also increased demand for dry bulk freight. Recent problems have caused port congestion and longer ship ties.
Covid-19-Covid-19 destroyed industry. GOGL earned $607m in 2020. Covid’s slowing demand lowered this. This slowed GOGL and shipping income. Company grew with demand.

If it doesn’t help GOGL, the above info is meaningless. Let’s examine some investment measures.
Regarding Charter Rates-Capsize ships break even at $12,800 per day, Panamax at $8,400. According to the last quarterly data, each Capsize ship earns over $20,000 per day and each Panamax ship earns over $15,000.
Golden Ocean Group’s TCE rate averaged $24,920 per day in Q2 2021. It was $15,886 per day last year.
Slow shipbuilding-GOGL’s large fleet can benefit from slower new vessel arrivals. GOGL has the world’s largest Capesize fleet. The ships have a 6.5-year lifespan, and the company won’t buy any.

The pandemic will boost demand for commodities. Supply chain problems are increasing dry bulk freight demand. These factors make GOGL a great investment in a booming market.