Why maritime limited stocks exploded and then fell today
stock sea limits (SE 4.13%) They fell on Monday after the company reported fourth-quarter 2023 results before markets opened. It was a great quarter and year for the company, leading to enthusiasm in the market. But uncertainty about 2024 has put a damper on investors’ initial enthusiasm. It rose nearly 14% in early trading, but then fell to as low as 2.5%. As of 12:40 PM ET, marine stocks were up about 4.5%.
progress of the year
Sea operates a video gaming business, an e-commerce platform, and financial technology (fintech) services. In 2023, this segment delivered the company’s first annual net profit since its listing in 2017. Net income for the year was $163 million, compared to a loss of $1.7 billion in 2022.
By the end of 2022, Sea had significantly reduced sales and marketing spending to increase profitability. However, it has begun to look for opportunities to increase its market share through the Shopee e-commerce platform. The good news is that management said it has made “meaningful gains in market share” in 2023. The bad news is that the company had a net loss of $112 million in the fourth quarter, as it once again increased sales and marketing spending to achieve expansion. market share. But this was a better result than analysts had expected.
What should Sea investors do now?
Growth investors are curious about Sea stock right now. Sea stock only grew its earnings by 5% in 2023, which isn’t much. And the market remains concerned that competition for Sea’s Shopee platform could increase next year.
While these concerns may be valid, we believe the stock’s valuation more than makes up for them, considering it’s still only 2x trailing sales. Moreover, the company has three business segments, which when viewed collectively can obscure some of the positive developments achieved individually. For example, Shopee’s e-commerce revenue increased 31% this year, and Sea’s fintech platform posted its first ever profit.
In my view, while there are some concerns, there are still many reasons to be optimistic about Sea. But overall, the year has been positive for the company.
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Sea Limited. The Motley Fool has a disclosure policy.
