On March 31, the company filed a Form 10-K in which it warned investors of an upcoming restructuring scheduled to be agreed upon by April 15. This move should significantly dilute existing shareholders and reduce Eagle Bulk's share price. The company's management also expressed significant doubt in its ability to continue as a going concern if the company cannot agree to restructuring terms with lenders.
The stock was down 6.03% to $3.93 at 11:16 a.m. More than 1 million shares had changed hands, greater than the average volume of 771,598.
Separately, 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 some concerns, 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 unimpressive growth in net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk."
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 26.1% when compared to the same quarter one year ago, falling from -$29.84 million to -$37.63 million.
- 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.
- The gross profit margin for EAGLE BULK SHIPPING INC is rather low; currently it is at 23.16%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -96.53% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$1.86 million or 145.19% 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 is very high at 2.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, EGLE has managed to keep a strong quick ratio of 2.09, which demonstrates the ability to cover short-term cash needs.
- 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.