To The Moon

In today's edition, we will track the fundamental readings of long-term bullish companies in strong (TigerTrade Top 1 Gainer) concepts each week and look forward to your attention and discussion.

Disclaimer: Capital at risk. This is not direct financial advice or a recommendation to acquire or dispose of any investment, but for communication only.

3 of the 3 indexes closed red last week. $S&P 500(.SPX)$ led, and $NASDAQ(.IXIC)$ lagged with -3.33%. The 5 best-performing industries of last week are industrial gases, shipping, agricultural & farm machinery, brewers and construction and engineering.

Looking at the industry of shipping, the top 5 stocks all have strong performance in the last week, including $Navios Maritime(NM)$, $Seanergy Maritime(SHIP)$, $ZIM Integrated Shipping Services Ltd.(ZIM)$, $UNITED MARITIME CORPORATION(USEA)$ and $Diana Shipping(DSX)$.

Considering the different perceptions of the stock, this time TigerPicks choose $ZIM Integrated Shipping Services Ltd.(ZIM)$ to have a fundamental highlight to help users understand it better.

$ZIM Integrated Shipping Services Ltd.(ZIM)$

Ocean Freight Rates, After Tumbling 80%, Are Back At Pandemic Levels

Of course, there is no guarantee that ZIM will present strong earnings in a market that has struggled with falling spot rates for container shipping for the majority of 2023. There is also no guarantee that ZIM will make an accurate forecast for EBITDA or free cash flow in 2023.

With that said, ocean shipping rates have now returned to pre-Covid levels, and while spot rates may fall further in the short term, I believe the market has made its peace with pricing in a 2023 shipping industry recession.

ZIM Is Well-Prepared For A Recession

ZIM has very little net debt, which may be the company's strongest suit, as it will be much easier to navigate a recession than some of its peers with higher debt loads. The shipping company reported only $250 million in net debt, resulting in a net debt to market value ratio of around 10%, which is extremely low.

ZIM also easily covers its debt service payments with free cash flow, so even if the company's free cash flow shrinks in a 2023 recession, the company won't have to worry about its interest payments.

In the nine months ending September 2022, ZIM paid just $156.8 million in interest expenses while recording free cash flow of $4.75 billion.

ZIM Has Been Consistently Profitable

Despite the fact that container spot rates fell rapidly in 2022, reflecting declining consumer demand, ZIM was able to maintain consistent profitability between January and September.

ZIM's consistent profitability has been supported by strong average freight rates of $3.6K per container. Fourth quarter results are expected to be lower than 3Q-22 results, but ZIM should remain profitable.

Stock Price Forecast:

Here are the target price forecast for the future 12 months from analysts on CNNMoney.com.

The 6 analysts offering 12-month price forecasts for ZIM Integrated Shipping Services Ltd have a median target of 18.00, with a high estimate of 30.40 and a low estimate of 15.00. The median estimate represents a -24.91% decrease from the last price of 23.97.

Hope this analysis helps you get more understanding of the company's whole image, Tiger Picks will follow up the monthly performance as a longterm track.

Resource: https://seekingalpha.com/article/4581442-zim-integrated-no-debt-positive-free-cash-flow-reiterate-buy

What are your thoughts on $ZIM Integrated Shipping Services Ltd.(ZIM)$?

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