Israeli cargo transport company Zim Integrated Shipping Services $ZIM has been operating since 1945. Despite its long history, the company started to take off in generating income when the COVID-19 pandemic started. Nevertheless, Zim's top line has increased significantly due to rising shipping service demand and an increase in international freight rates.
Even though investors initially flocked to this international shipping business, in 2022 Zim's share price plummeted. Moreover, growing worries about a potential worldwide recession have caused an unprecedented 66% decline in Zim's shares this year. As a result, its shares are currently trading at ridiculously low levels.
Zim's top line is expected to significantly drop the following year, although this negative growth may be already priced in. Thus, the company's sky-high yield and bargain-basement pricing are two good arguments for considering this undervalued stock.
Investors in ZIM may feel discouraged by the dropping stock price trajectory. However, the declines will eventually come to an end, and when they do, I have a sense that investors will quickly realize that ZIM stock is a great deal at a valuation of just four times projected earnings for 2023.