NEW YORK (
-- DHT Holdings
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally weak debt management and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1574.4% when compared to the same quarter one year ago, falling from $3.58 million to -$52.75 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DHT HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $5.59 million or 37.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio of 1.47 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.84, which shows the ability to cover short-term cash needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1271.42% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
DHT Holdings, Inc., through its subsidiary, DHT Maritime, Inc., owns and operates a fleet of double-hull crude oil tankers. The company has a P/E ratio of 5.2, below the average transportation industry P/E ratio of 5.4 and below the S&P 500 P/E ratio of 17.7. DHT has a market cap of $121 million and is part of the
industry. Shares are down 59.6% year to date as of the close of trading on Wednesday.
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