TOP Ships Inc (NASDAQ: TOPS) is headed up again in the market this morning, following up on the strong gains that we’ve seen on the stock as of late. However, with no news out there, many are wondering just what’s going on. Now the big question is whether or not these gains will continue. Today, we’ll talk about:
- Why TOPS is up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why TOPS Is Climbing
As mentioned above, Top Ships is having a great start to the trading session today, following up on the recent gains that we’ve seen from the stock. Interestingly, this isn’t the only stock in the shipping sector that’s climbing. In fact, they all seem to be trading in the green, some with incredible gains. So, what’s the deal? The truth is that it has less to do with TOPS and more to do with the industry as a whole.
While there are plenty of sectors in pain thanks to the Trade War, the shipping sector seems to be benefiting from it. That’s because the Trump Administration recently announced that it would be putting an end to the Postal Treaty, a treaty that is more than a centry old!
The treaty ultimately provided lower costs of shipments to and from some regions, eating into profits made by TOPS and other shipping companies. However, the end of the Postal Treaty opens the door for shipping companies to generate stronger revenue.
Interestingly, if you look at the TOPS stock chart and many others before the end of the treaty, you’ll see that the stock wasn’t having the best of times, along with plenty of others in the sector. At the same time, the stock has traded with high short interest. However, after the end of the Postal Treaty, that has started to change. It seems like a new breath of fresh air is being breathed into shippers, lifting investor confidence in these stocks.
What We’re Seeing From The Stock
With excitement in the shipping sector running on high, TOP Ships is having a great day in the market today. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (11:15), TOPS is trading at $1.88 per share after a gain of $0.22 per share or 12.95% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on TOPS. In particular, we’re interested in following the story surrounding the company’s work to take advantage of the changing tides in the shipping sector. One thing that is worth keeping in mind is that right now the stock is peachy, but it may not always be. Top Ships and others in the sector are known for death spiral financing. They haven’t had a good history of making moves that are in the best interest of investors. So, if you’re going to tread here, make sure to do so lightly!
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