NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- The gross profit margin for KNIGHTSBRIDGE TANKERS LTD is rather high; currently it is at 65.70%. Regardless of VLCCF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VLCCF's net profit margin of 31.40% significantly outperformed against the industry.
- The revenue fell significantly faster than the industry average of 39.6%. Since the same quarter one year prior, revenues fell by 13.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 46.6% when compared to the same quarter one year ago, falling from $13.44 million to $7.18 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, KNIGHTSBRIDGE TANKERS LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Knightsbridge Tankers Limited, through its subsidiaries, engages in the seaborne transportation of crude oil and dry bulk cargoes worldwide. The company's customers include oil companies, tanker companies, dry bulk companies, petroleum products traders, government agencies, and other entities. The company has a P/E ratio of 9.7, below the average transportation industry P/E ratio of 11 and below the S&P 500 P/E ratio of 17.7. Knightsbridge Tankers has a market cap of $479.7 million and is part of the
industry. Shares are down 18.5% year to date as of the close of trading on Wednesday.
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