This containership company beat analysts’ estimates by $0.05 last quarter, and it is expected to grow earnings at an annual rate of 16.5% over the next five years. The company’s current annual dividend yield is 3.45%, paid quarterly.
Atlas Corp. (ATCO)
From Cabot Global Explorer
Atlas Corp. (ATCO) shares in their first week in the Explorer portfolio moved in line with the market to settle at 14.5. Shares were up 6.9% yesterday. The company charters a fleet of 118 containerships.
The pandemic has led to distorted trade flows and a worldwide container shortage crisis. Demand for these shipping containers is surging while supply is frozen, so shipping rates are skyrocketing. Making matters worse is that the global container fleet is shrinking and, you guessed it, containers are largely manufactured in China.
We can take advantage of this situation with Vancouver-based Atlas Corporation, which operates as an independent manager of containerships. Atlas posted in its last reported quarter operating margins of 40% with revenue increasing for the quarter, year over year, 36.6% and earnings growing 96.6%. I view ATCO as a trading position with a target price of 20. BUY A HALF
Carl Delfeld, Cabot Global Stocks Explorer, cabotwealth.com, 978-745-5532, March 11, 2021