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TheStreet Open House

Why Odyssey Marine Exploration (OMEX) Stock Is Up Today

NEW YORK (TheStreet) -- Odyssey Marine Exploration (OMEX) was gaining 7.6% to $2.27 Monday after announcing that it recovered about 1,000 ounces of gold from an 1857 shipwreck.

The company recovered the gold during a reconnaissance dive to the SS Central America shipwreck on April 15. The Florida-based company found five gold ingots and two $20 Double Eagle coins during the dive. One coin was minted in 1857 in San Francisco, and the other was minted in 1850 in Philadelphia.

Odyssey conducted the two-hour dive during the transit of the Odyssey Explorer research vessel from the U.K to Charleston, S.C. under contract with Recovery Limited Partnership, which will receive the vessel. Odyssey will receive 80% of recovery fund until a fixed mobilization fee and a negotiated day rate are paid by RLP. After that, Odyssey will receive 45% of the recovery proceeds.

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TheStreet Ratings team rates ODYSSEY MARINE EXPLORATION as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ODYSSEY MARINE EXPLORATION (OMEX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk."

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

  • Net operating cash flow has decreased to $14.71 million or 18.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, OMEX's quick ratio is somewhat strong at 1.15, demonstrating the ability to handle short-term liquidity needs.
  • OMEX has underperformed the S&P 500 Index, declining 23.81% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Compared to other companies in the Professional Services industry and the overall market, ODYSSEY MARINE EXPLORATION's return on equity significantly trails that of both the industry average and the S&P 500.
  • 41.21% is the gross profit margin for ODYSSEY MARINE EXPLORATION which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 62.35% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: OMEX Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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