We've downgraded Seaspan (SSW) from hold to sell, driven by its deteriorating net income, disappointing return on equity, generally weak debt management, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Net income fell from -$20 million in the year-ago quarter to -$241.9 million in the most-recent quarter. ROE also decreased, and EPS are down, though the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year. Seaspan's debt-to-equity ratio is 2.3, which is higher than the industry average. Its quick ratio is 5.8.
Shares have tumbled 74.9% over the past year, underperforming the S&P 500. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
All ratings changes from April 30 are listed below.
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