Top Ships Inc (NASDAQ: TOPS) is having an incredibly strong start to the trading session this morning as traders go wild and send the stock soaring on high volume. Today, we’ll talk about why the stock is moving up, what we’re seeing from the stock, and a warning surrounding TOPS and other Greek shipping companies.
Why TOPS Is Climbing Today
As mentioned above, Top Ships is having an incredibly strong start to the trading session this morning. As soon as we received the alert from our partners at Trade Ideas, we started digging to see exactly why the stock was making a run for the top. In our digging, we didn’t find any news releases surrounding the stock, so there is no real fundamental reason for the gain we’re seeing in the value of TOPS. However, this isn’t the first time.
Ultimately, we see runs like this all the time in the shipping sector. Ultimately, they are purely the result of technical signals that are exciting traders. When these signals hit, the stock flies, bringing in new traders who send it further and further toward the top. So, if you’re wondering why TOPS is running on high volume, the answer is simply that traders are trading.
What We’re Seeing From The Stock
At the end of the day, when traders get excited, stocks move, and that’s exactly what we’re seeing out of Top Ships today. As excitement continues to grow, the stock is making a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:31), TOPS is trading at $0.45 per share after a gain of $0.08 per share (21.54%) thus far today.
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A Warning Surrounding TOPS And Others Like It!
I’ve been following the shipping industry for some time. I’ve seen the ups and I’ve seen the downs. I warn you, Top Ships may be making a run for the top today. but that’s not going to last very long! The reality is that we see this time and time again with TOPS and others like DRYS, DCIX, SHIP, and more.
Ultimately, while these stocks do tend to represent solid short-term trading opportunities, they are generally not a good choice for the long run. The reality is that the shipping sector started to struggle years ago, and those struggles continued for a long time. As a result, companies like TOPS and others in the industry started to take advantage of death-spiral financing. While moves with financiers like Kalani Investments have been a good source to line the pockets of management of these companies, they have been horrible for investors. Considering the history of TOPS and others like it, I wouldn’t be surprised to see more death-spiral financing in the future. Ultimately, Top Ships, Dry Ships, Diana Containerships, Seanergy Maritime, and other Greek bulk shippers are likely to run in short bursts, but also likely to fall far further than where they started when the run is over.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on TOPS and others in the dry bulk sector. In particular, we’re watching to see which of these companies starts to take their fiduciary responsibility to investors seriously and improve their financial picture. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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