We've just added a new "stock to buy now" pick to our watch list, and this stock could hand you a 133% profit over the next year.
You see, this company ties into the massive growth of one of the most-watched economic metrics: global trade.
Global trading activity is a popular gauge of global economic health. When countries trade with one another, fundamental factors (like supply and demand) and even political factors (like new laws) give one country advantage over the other. This lets economies grow more efficiently because the trading makes them become competitive participants in the global economy.
For example, if China were to increase its cost of labor, an American shoe company based in China would have to increase manufacturing costs. That would likely end up costing customers more money when they go to buy the shoes at their local store. While both the U.S.-based company and China ultimately get what they want, China has the better end of the trade. That's because it maintains leverage over the laws that govern where the shoes are made.
While the macroeconomics of global trading activity can be complicated, the health of the global trade and shipping industry can be boiled down to just one number.
And according to Money Morning Resource Specialist Peter Krauth, this number's recent movement shows why our latest stock pick could offer a huge 133% return by April 2018...
This Number Measures the Health of the Entire Global Economy
The best measure of the global shipping industry - and therefore global economic health - is the Baltic Dry Index (BDI).
Created in 1985, the BDI follows the price of shipping wheat, cement, coal, and other crucial raw materials around the world. The index follows the activity of three different categories of bulk carrier ships: Panamax, Capesize, and Supramax.
If you combine the total number of shipping routes for all three carrier classes, the BDI tracks the activity of 50 different routes.
"It's especially relevant because this segment of economic activity, the shipping of raw goods, is often early in the production chain," Krauth told Money Morning Members on April 12. "That makes the BDI a widely regarded leading indicator of commercial activity."
But the BDI has endured several periods of volatility over the last decade, as you can see in this chart...
During the 2008 financial crisis, cargo ships full of goods sat dormant at their ports. Exporting countries didn't have faith in the credit payments of the countries they were sending goods to.
This bankrupted many shipping companies and caused the BDI to collapse a stunning 93.9% from 11,648 in May 2008 to 711 in December 2008.
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But despite some volatility in 2011, the BDI index has significantly rebounded from those 2008 lows. It has gained 82.3% since December 2008 and 34.9% in 2017 alone. Right now, it hovers near 1,296.
This indicates how the bulk shipping market is quickly returning to profitability. From mid-February to late March, shipping rates soared a whopping 85%.
Meanwhile, commodity prices are steadily climbing, with the Bloomberg Commodity Index up 2.6% from its March 14 low.
"The shipping industry looks like it's finally emerging from its multiyear retreat," Krauth explained. "Ship fleets are projected to see long-term growth decelerate considerably, portending strong support for higher shipping rates for the foreseeable future."
That's why Krauth wants you to consider his stock recommendation.
Shares of this company are cheap right now, trading just above $8. However, they won't be cheap for long, as we project them to soar as much as 133% over the next 12 months...
The Best Stock to Buy Now to Profit from the Global Shipping Industry
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Krauth's favorite stock in the shipping sector is Golden Ocean Group Ltd. (Nasdaq: GOGL).
Golden Ocean is a Bermuda-based bulk shipping company that owns a fleet of Panamax, Capesize, and Supramax carriers. It operates 77 vessels with an average age of just four years. It owns another 45 vessels acquired when Golden Ocean bought two shipping firms during the post-2008 market gully.
This tremendous growth shows in the firm's recent earnings reports. For Q4 2016, Golden Ocean reported $0.06 per share on net income of $6.5 million. That's a stellar improvement from the Q3 2016 loss of $0.25 per share on a net loss of $26.7 million.
And investors have been taking note of Golden Ocean's dominance over other shipping peers. Since Dec. 30, 2016, the GOGL stock price has surged 74.5% to $8.22. Those gains beat other shipping stocks like Ship Finance International Ltd. (NYSE: SFL) and Frontline Ltd. (NYSE: FRO), which have lost 5.9% and 5.7% this year.
Analysts surveyed by Yahoo Finance project Golden Ocean stock could rise as much as 70.3% to $14 per share by April 2018. That would be if you buy in at the current price of $8.22.
However, Krauth recommends waiting for GOGL stock to correct to the $6-$6.50 range. Since the shipping sector is historically volatile and GOGL has already seen a big 74.5% gain in 2017, a short-term pullback is likely to happen soon.
Once the stock dips to that range, a great buying opportunity will open up for investors.
And if you buy at the low end of that $6 range, you could see an even bigger return of 133% if shares hit $14 by next April. That would make Golden Ocean one of the best stocks to buy of 2017.
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