Ardmore Shipping (ASC) Stock Falls After Pricing Public Offering

Ardmore Shipping (ASC) shares are lower after the company priced the 4 million shares sold by GA Holdings in a public offering.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Ardmore Shipping (ASC) - Get Report were falling 11.2% to $13.13 with heavy trading volume on Tuesday after the shipping company priced the 4 million shares sold by GA Holdings in a public offering.

GA Holdings priced the 4 million shares of Ardmore Shipping in the public offering at $13.25 a share. The selling company granted the underwriters of the offering a 30-day option to buy up to 600,000 additional shares of common stock at the same price.

The shares sold by GA Holdings represent about 49% of the shares of Ardmore Shipping the company owns.

Ardmore Shipping will not receive any proceeds from the offering as it is not selling any shares.

About 2.5 million shares of Ardmore Shipping were traded by 3:10 p.m. on Tuesday, above the company's average trading volume of about 223,000 shares a day.

TheStreet Ratings team rates ARDMORE SHIPPING CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate ARDMORE SHIPPING CORP (ASC) 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. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

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

  • The debt-to-equity ratio of 1.12 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, ASC's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ARDMORE SHIPPING CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for ARDMORE SHIPPING CORP is rather high; currently it is at 57.84%. It has increased significantly from the same period last year. Along with this, the net profit margin of 28.82% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 9253.24% to $14.40 million when compared to the same quarter last year. In addition, ARDMORE SHIPPING CORP has also vastly surpassed the industry average cash flow growth rate of -19.63%.
  • This stock has managed to rise its share value by 46.11% over the past twelve months. Regarding the future course of this stock, we feel that the risks involved in investing in ASC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: ASC
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