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Why GasLog (GLOG) Is Rising Today

Stocks in this article: GLOG

NEW YORK (TheStreet) -- GasLog (GLOG) rose 7.3% to $18.74 Thursday after the announcement of an upsized public offering of 9.5 million common shares.

The shipping company increased the number of shares in the public offering from the originally announced 8.4 million common shares. GasLog will offer the common shares in for public offering for $15.75 a share.

GasLog will also sell about $36.5 million worth of common shares at the public offering price to a private placement of certain directors and officers as well as one unspecified major shareholder. The company expects to net about $178 million from the public offering and private placement.

TheStreet Ratings team rates GasLog as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate GASLOG LTD (GLOG) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GLOG's very impressive revenue growth greatly exceeded the industry average of 5.6%. Since the same quarter one year prior, revenues leaped by 154.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GASLOG LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GASLOG LTD increased its bottom line by earning $0.07 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.07).
  • Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 31.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, GASLOG LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Currently the debt-to-equity ratio of 1.59 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, GLOG has managed to keep a strong quick ratio of 2.00, which demonstrates the ability to cover short-term cash needs.
  • You can view the full analysis from the report here: GLOG Ratings Report

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