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Le 6 Juillet, specialist in dry bulk transport Seanergy Maritime (NASDAQ:BOAT) announced on creation of a spin-off of united maritime (NASDAQ:USE A). This saw USEA shares make their debut on the Nasdaq with resounding enthusiasm. Today is the thunder of a gain of more than 125% at the time of this writing.
Seanergy presents itself as one of the only pure play shipping companies listed on the American capital markets. According Mitsui OSK Lines (OTCMKTS:MSLOF), capesize ships represent the “largest class of bulk carrier that can carry any type of cargo, such as iron ore and coal in the main”. Mitsui also points out that these ships are called “capsize” because they “cannot pass through the Panama Canal and must go around the Cape of Good Hope to navigate between the Pacific and Atlantic oceans”.
According to the United Maritime press release, the company started operations with a capsized bulk carrier. In the future, it plans to expand into different shipping sectors and pursue a diversified business model.
From a market performance perspective, the bullish support for USEA stock is significant. The major indexes have been beaten this year due to soaring inflation and fears of recession. However, the title’s impressive debut may help ease concerns.
USEA Stock points to a possible pivot
Early days aside, sentiment towards shipping companies has been gloomy this year. For example, Seanergy – although up around 6% today – is down almost 22% year-to-date (YTD).
Other rivals in the shipping space, including ZIM Integrated Shipping Services (NYSE:ZIM) and danaos (NYSE:CAD), also suffered significant losses. These stocks are down about 26% and 19% since the start of the year, respectively. They are also up today, likely in sympathy with USEA stocks.
A few months ago, analysts had a bad opinion of the shipping industry. At the time, many headwinds – including China’s lockdown policies, oil demand and Federal Reserve warmongering – hurt the sector outlook. Now, while many of these challenges still linger, the USEA’s sharp rise means Wall Street is seeing a light at the end of the tunnel.
All eyes on China (again)
The USEA stock brings several lines of encouragement to the table. Now, however, analysts are likely to focus on China again. Unfortunately, reports indicate that Covid-19 cases recently doubled in one day in Shanghai. This is fueling concerns that the city, which is an important economic hub, could enter lockdowns again.
With this in mind, potential investors will need strong conviction and good fortune to successfully play United Maritime.
As of the date of publication, Josh Enomoto has not held (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
