More than 2.2 million shares of the shipping company were traded by 3 p.m., compared to a daily average trading volume of about 436,000 shares a day. The stock was falling -30.2% to $1.94.
The drop in share price comes after two Seeking Alpha posts that compare Eagle Bulk Shipping to Genco's recent bankruptcy ruling.
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TheStreet Ratings team rates EAGLE BULK SHIPPING INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate EAGLE BULK SHIPPING INC (EGLE) a SELL. This is driven by a few notable weaknesses, 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 deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Marine industry. The net income has significantly decreased by 1744.1% when compared to the same quarter one year ago, falling from $1.37 million to -$22.59 million.
- The debt-to-equity ratio is very high at 2.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.04, which clearly demonstrates the inability to cover short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Marine industry and the overall market, EAGLE BULK SHIPPING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $0.17 million or 86.70% 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 share price of EAGLE BULK SHIPPING INC has not done very well: it is down 15.05% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- You can view the full analysis from the report here: EGLE Ratings Report
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.