Perhaps there is no industry more sensitive to global economic activity than the international shipping industry. The financial crisis became a category 5 hurricane last September and blew the entire global shipping industry off course. All sectors of the shipping industry were affected – from oil tankers to dry bulk shippers to container ships.

The sudden drying-up of credit, including trade finance, and collapsing trade volumes have changed the industry’s concerns completely. Only a year or so ago the concern in the shipping industry was whether the infrastructure of many countries, especially port facilities, was expanding rapidly enough to handle break-neck growth in shipping traffic volumes.

As shipping rates have plunged, the concern now is whether the bottom in the shipping industry has been reached or whether there is further to go on the downside. The good news is that “green shoots” are appearing – again ships are waiting in lines at

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by Edward Hugh: Barcelonabr /br /br /blockquoteIn view of Greece's EMU membership, the availability of external financing is not a concern, but the correction of cumulating indebtedness could weigh appreciably on growth going forward. While the risk of transmitting vulnerabilities to the euro area is very small reflecting Greece’s small relative size, large persistent current account deficits would increase the vulnerabilities to a reversal in market sentiment, leading to a corrective retrenchment of private sector balance-sheets in the face of rising indebtedness, and a possible appreciable rise in the cost of funding over time. These developments would have significant negative implications for growth.br /a href="http://www.imf.org/external/pubs/cat/longres.cfm?sk=21937.0"Greece: 2007 Article IV Consultation/a - IMF Staff Report/blockquotepbr /br //ppa href="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s1600-h/bond+spreads+2.png"img id="BLOGGER_PHOTO_ID_5278548924887872770" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; HEIGHT: 170px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s320/bond+spreads+2.png" border="0" //abr /The above quited paragraph from the IMF is a very good example of what used to be ...

Thanks to Gary, who contributed this comment on a post about the Baltic Dry Index a week ago -

“What great time to buy shipping stocks - before you know it demand will be back because pent-up demand will force products to ship. Stocks like Genco (GNK) and others will expode again.”

  View the full GNK chart at Wikinvest

Not sure about the “explosion” you’re anticipating, Gary, but I’ve got to agree with you on this point - demand for the dry bulk shippers will be back. Dry bulk goods, like metals and grains, are the foundation of economic growth - and even as the world’s economy shrinks in the short term, its population (and corresponding demand for food, energy, and consumer products) continue to grow in the long term.

If only I had paid attention to Gary’s advice on Friday afternoon and pulled the trigger on a dry bulk

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Maxim Group analyst Charles W. Rupinski recommended Genco Shipping & Trading:

Track his pick at:

http://trackthepros.com/stocks/category/1598

a. market sentiment in the dry-bulk shipping segment should improve over the rest of the year and that valuation multiples should expand.

b. compelling dividend yields and low stock valuations should act as a floor on stock prices over the medium term.

c. dry-bulk fleet growth year-to-date remains restrained at 3.8%, and we believe that could make for a tighter market as freight movements accelerate during the rest of the year. Time charter rates remain at very high levels (in some cases higher than spot rates), which has positive implications for the overall medium-term supply/demand balance.

d. Our price target for Genco is $74; A positive sentiment shift for the group would entail a valuation nearer to the top recent range, in our view.

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Genco Shipping & Trading (GNK) returned to the position of top performer for the week after being in first place in mid-August and Wall Street has been raising earnings forecasts on the shipper since then. Estimates of $7.53 are above last month’s $7.28.

Genco turned in a strong second quarter, more than doubling the year-prior second-quarter earnings per share. The company has exceeded analyst earnings expectations for the past four straight quarters by an average of 15%.

The company’s return on equity (ROE) of 25% is ahead of the industry’s average of 14%. Its net margin of 68% soared past the industry average of 18%. Genco offers a dividend, yielding 6.7%, topping the industry average yield of 5.2%. "GSTL" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Genco Shipping & Trading (GNK) returned to the position of top performer for the week after being in first place in mid-August, and Wall Street has been raising full-year earnings forecasts on the shipper since then. Estimates of $7.53 are above last month's $7.28.

Genco turned in a strong second quarter, more than doubling the year-prior earnings per share. The company has exceeded analyst earnings expectations for the past four straight quarters by an average of 15%.

The company's return on equity (ROE) of 25% is ahead of the industry's average of 14%. Its net margin of 68% soared past the industry average of 18%. Genco offers a dividend, yielding 6.7%, topping the industry average yield of 5.2%.

Company Ticker One-WeekReturn Genco Shpg&Trdg GNK 6.76% Wabtech WAB 4.76% Cf Indus Hldgs Cf 4.24%

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After the close of trading yesterday, Genco Shipping and Trading (GNK) announced a new $320 million loan facility. The financing will be used to fund the previously announced acquisition of six drybulk newbuildings.

GNK is trading at about 8x projected earnings, making it one of the cheapest stocks in the Focus List. Despite this low valuation, the company is expected to growth strongly with earnings reaching $7.48 this year and $10.28 next year.

The low valuation and strong growth provides a margin of safety against the stock's volatility. Our expectation that is that the market will eventually reward GNK with a higher share price as earnings continue to exceed forecasts.

ConocoPhillips (COP) is currently trading at less than 6x projected earnings for this year.

Like many energy stocks, COP has been adversely affected by falling oil prices. Earnings estimates have also been trimmed over the past few weeks,

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