GOGL - Golden Ocean (GOGL) stock is thriving but May 22 will be key
2024-05-16 09:10:52 ET
Golden Ocean Group (NASDAQ: GOGL) stock price has done well this year, helped by its strong market share gains. It has soared by over 50% while the Nasdaq 100 and S&P 500 indices have risen by less than 10%.
GOGL has outperformed other shipping companies like ZIM Integrated, Danaos, Costamare, and Matson.
Golden Ocean Group’s earnings ahead
Golden Ocean is one of the biggest players in the dry bulk shipping industry. It pwns 83 dry bulk vessels that it uses to transport items like grains, fertilizers, ores, and coal for clients from around the world. The company focuses on large vessels known as Capesize and Panamax, which have a relatively low age.
Like other shippers, the company does well when prices are in a strong uptrend. That has happened this year as the Baltic Dry index rose from a low of $1,306 and peaked at $2,425 in March. This surge happened because of the challenges in Panama and the Red Sea. Recently, however, the price has dropped to $1,890.
The company has been under pressure in the past few months. Its net income in 2023 dropped to $112.3 million from $461 million a year earlier. However, its fourth quarter’s net profit rose to over $57 million because of its presence in the spot market.
It has also benefited from its positioning in the large size dry bulk vessels, which have continued to outperform the broader industry.
The company is also doing well because of the strong demand from Asian countries like China, Japan, and South Korea.
Recent macro data showed that some of the Asian economies are doing well, which explains why prices of key items like coal and iron ore have jumped. Also, the Capesize segment is seeing slow fleet growth rate.
Looking ahead, the next important catalyst for the GOGL stock will be the company’s earnings scheduled for May 22nd. Analysts expect its revenue will come in at $195 million, a 47% YoY increase. They expect its annual revenue guidance to be $660 million, up by 34.7% from the same period in 2023.
GOGL stock is also a popular name among income-focused investors because of its strong dividend yield. Data by SeekingAlpha shows that it has a dividend yield of 8.15%, higher than most companies.
Golden Ocean Group stock price forecast
On the weekly chart, we see that the GOGL share price has been in a strong bull run after bottoming at $1.61 in 2020. It has bounced back by over 820%, giving it a market cap of over $2 billion.
The rally accelerated after forming a golden cross pattern in July 2021. Most recently, it has risen above the crucial resistance level at $13.71, its highest swing in July 2022. By moving above that level, it invalidated the double-top pattern.
Therefore, the stock will likely retreat and retest the support at $13.70 and then resume the bullish trend to retest the resistance at $20.
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