Castor Maritime Stock Price Forecast September 2021 – Time to Buy CTRM Stock?

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Castor Maritime (CTRM) stock rose over 15% yesterday and took its YTD gains to 42.5%. The stock has been in an uptrend and is up 31% over the last month.

However, CTRM stock still trades at a significant discount to its 52-week highs. What’s the forecast for Castor Maritime stock and is should you buy the stock in September?

CTRM stock technical analysis

castor maritime stock

Castor Maritime stock is looking bullish on the charts. It was facing resistance at the 50-day SMA (simple moving average) but has crossed above the price channel. The next resistance for the stock is at the 100-day SMA which is currently at $2.92. The 14-day RSI (relative strength index) is 64.08. While it is currently a neutral indicator, it is getting near the overbought zone. RSI values above 70 signal overbought positions.

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Castor Maritime recent developments

Castor Maritime is a shipping company having a growing fleet of both dry bulk and shipping tankers. The company has been growing its fleet rapidly and has been financing the growth through a mix of debt and equity.

Earlier this week, CTRM announced new charter rates. It said that the M/V Magic Nebula has been contracted at a gross daily charter rate of $31,750. The M/V Magic Moon has been fixed at a gross daily charter rate of $30,250.

Also, the M/V Magic Nova, which is a Panamax dry bulk carrier built in 2010, has been contracted at a gross daily charter rate of $32,000. The contract also includes a one-time gross ballast bonus of $1,300,000.

Dry bulk rates have been rising

Dry bulk rates have been rising which bode well for companies like Castor Maritime. The global economy has been doing well which has led to higher demand for commodities, ranging from industrial metals to agricultural goods. There has also been a container shortage.

Castor Maritime stock forecast

CTRM is a penny stock so not many analysts cover it. However, the outlook for the stock is looking bullish. Castor Maritime is growing its fleet at a time when the demand for shipping companies is quite strong. On a fully delivered basis, the company would own a total of 27 vessels with a total capacity of 2.3 million dwt. If we look at the company’s second-quarter earnings report, the growth strategy is paying off.

Castor Maritime reported revenues of $21.8 million in the second quarter of 2021 which were significantly higher than the $2.6 million that it had posted in the corresponding period in 2020. It reported an adjusted EBITDA of $10 million in the quarter which was up tenfold from the corresponding quarter in 2020. The increase in earnings has come from the dual impact of higher charter rates amid multi-year high shipping rates and the increase in CTRM’s vessels.

CTRM earnings

Castor Maritime CEO Petros Panagiotidis sounded positive on the outlook for the shipping industry as well as the company. “Strong demand for dry bulk transportation services has resulted in robust freight rates, with the upward momentum expected to be sustained by the tight vessel supply and historically low newbuilding orderbook,” he said in the prepared remarks in the earnings release.

Castor Maritime long-term forecast

The long-term forecast for CTRM looks bullish. The company is expanding the fleet which would lead to higher revenues and profitability in the future. If the current momentum in the shipping industry sustains, CTRM could be a long-term winner.

Analysts are turning bullish on shipping companies

H.C. Wainwright analyst Magnus Fyhr issued a bullish note on the shipping industry and initiated coverage with a buy rating on five stocks. To be sure, CTRM wasn’t among the stocks that he initiated his coverage on. He said, “Dry bulk equities [are] up more than 100% in the past year and spot rates [are] at their highest level in over a decade.” While he admitted to moderating demand growth, he sees limited supply growth to offset that. The brokerage is also bullish on the oil tanker industry and sees an “attractive investment opportunity” in the space.

CTRM stock valuation

Looking at the valuations, CTRM stock trades at an LTM (last-12 months) EV (enterprise value)-to-EBITDA multiple of 20.6x. The price-to-book value ratio is 0.8x. Usually, a price-to-book value multiple below one is a sign of undervaluation. Overall, the valuation multiples for Castor Maritime stock look reasonable.

If you are looking at a stock to play the uptrend in the shipping industry, CTRM would fit the bill. With its expanding fleet, the company is an attractive investment proposition at these prices.

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About Mohit PRO INVESTOR

Mohit Oberoi is a freelance finance writer based in India. He has completed his MBA in finance as a major. He has over 15 years of experience in financial markets. He has been writing extensively on global markets for the last eight years and has written over 7,500 articles. He covers metals, electric vehicles, asset managers, tech stocks, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.