logo
  Join        Login             Stock Quote

Looking Deeper Into the Baltic Dry Index $SEA

 January 14, 2010 07:03 PM
 


Mention shipping stocks and one of the first things that comes to mind is the Baltic Dry Index. While the Baltic Dry Index is interesting and useful it is also misleading. This is essentially because of the way in which it is constructed. The BDI is an average of three indices the Capesize, Panamax and Supramax.

Baltic Dry Index

The following gives one a bit of an idea as to the classifications:

[Related -Aetna Inc (AET) & Coventry Health Care, Inc. (CVH): Game Changer]

What is interesting is how the Handysize index is excluded from the Baltic Dry Index. This is no big deal, but the problem really lies with how volatile the Capesize index is. Due to the relatively small numbers of Capesize vessels the demand and supply is very volatile compared to the numerous numbers of Handysize vessels.

Baltic Capesize Index

Baltic Handysize Index

[Related -How to Avoid the Losers and Find the Winners]

I think the more emphasis should be placed on looking at price behaviour of the Handysize Index than the Baltic Dry Index itself…….the trends are considerably less subject to noise and deception.

In any event the behaviour of the Handysize index suggests that there is a clear pick-up in demand for ocean freight, perhaps little wonder why shipping stocks are now making up for lost time!

iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageIntegrated Device Technology Inc. (IDTI) Q1 Earnings Preview: Another Beat and Pop?

Integrated Device Technology Inc. (NASDAQ:IDTI) will issue first quarter 2015 financial results on July 28, read on...

article imageHerbalife Ltd. (NYSE:HLF) Q2 Earnings Preview: The Potential To Shock?

Herbalife Ltd. (NYSE:HLF) will release its second quarter 2014 financial results after the close of trading read on...

article imageHealth Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America

As of this keystroke, Health Net, Inc. (NYSE: HNT) shares are up around 4% on the day. The managed health read on...

article imageHomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?

HomeAway, Inc. (NASDAQ:AWAY) will report its financial results for the second quarter ended June 30, 2014 read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.