Strength Seen in Genco Shipping (GNK): Can Its 10.4% Jump Turn into More Strength?

Genco Shipping & Trading (GNK) shares soared 10.4% in the last trading session to close at $13.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7.1% gain over the past four weeks.

The upside was driven by the fact that the Baltic dry index reached its highest level on Apr 21 since October 2010. Notably, the Baltic dry index tracks rates for capesize, panamax and supramax vessels ferrying dry bulk commodities. The rise in the index value was driven by the uptick in the larger capesize vessel unit owing to increasing iron ore shipments from Brazil. The northward movement of this key index reflects the optimism surrounding the dry bulk market

Price and Consensus

Price Consensus Chart for GNK

This transporter of drybulk cargo is expected to post quarterly earnings of $0.03 per share in its upcoming report, which represents a year-over-year change of +117.7%. Revenues are expected to be $48.16 million, down 3.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Genco Shipping, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GNK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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