The holiday season’s just around the corner. About time to pull out that wallet and buy gifts for friends and loved ones…
But remember the chip shortage? Much harder to gift someone that new Xbox or PS5 when the computer chips aren’t available…
There’s a silver lining to supply chain crises like these, of course: traders can potentially profit off the supply squeeze.
That’s what I did — to the tune of 700+% on AMD, an American semiconductor.
And now, a new global supply chain problem is brewing, offering smart traders big-time profit potential…
See, few US shoppers consider how many of their goods come from other countries.
China, in particular.
There’s more awareness today about buying domestically vs. globally, but plenty of people buy whatever’s more convenient without regard for where it comes from.
That means LOTS of shipping stuff from overseas to the US.
A key component of this massive global system is the humble shipping container...
And that’s where this newest crisis lies:
A shipping container shortage believed to continue into 2022.
We can trace this back to 2019 when US-China relations started deteriorating over trade and other issues. Less trade means less need for shipping containers, so manufacturers produce fewer of these.
Then, the big bomb hits us: COVID-19.
Factories closed up. Manufacturers — unable to predict international spending on goods — cut their risk by pausing container production through 2020’s first half. They didn’t want tons of supply with no demand.
Things quickly went sideways when demand for international goods skyrocketed.
COVID also made it harder for sending and receiving ports to handle the cargo, but this wasn’t as big of an issue until vaccine rollouts.
People are ready to get back into society and spend their money, and these ports are struggling to keep up. Some have dealt with staff shortages from COVID and the ongoing labor shortage, while others have closed temporarily because of the virus.
Congestion at receiving ports only compounds the problem — especially as massive cargo ships attempt to arrive at major ports that aren’t designed to accommodate these behemoths.
Just look at, well, China. They have 8 out of the 10 busiest ports on earth, and they’re all running far below normal capacity as the nation continues to clamp down on COVID.
Some of their ports (Yangtian’s and part of Shanghai’s) also closed for a while because of Typhoon alerts.
So, in short: shipping container shortage + COVID-19 port staff shortage + port congestion + massive consumer demand = huge increases in shipping costs.
But that same equation could also mean MASSIVE profit potential in the shipping sector.
Now I know what you’re thinking: shipping might be one of the most snooze-worthy industries to look at. But boring is where I find some of the best profit potential.
One of my top picks is Pyxis Tankers Inc. (PXS), a Greek shipping firm.
It has quite an attractive book value. Company insiders hold 49.19% of shares as well — meaning they believe their firm’s ready to take off.
Short-term traders should target $1.80/share.
Why? The shares float (amount of shares available) isn’t as diluted as something like SNDL, which has a 1.89 billion float.
(Of course, people love to chase weed stocks because they’re exciting… but we’ll be over here finding big-money opportunities on snoozers.)
Meanwhile, If you have deeper pockets and a longer timeline, I’d say go for $14/share.
With all that said…
Overall, I believe this position has the potential to deliver us 100%+ gains in the next 6 months. Got $10,000? That could potentially turn into $20,000.
But here’s the thing: PXS is just 1 of 4 total shipping stocks I’ve got my eye on.
Click here if you want to find out what the other 3 companies are!
Getting your holiday gifts might be harder this year…
But at least you could potentially add to your holiday budget with these trades.
