NEW YORK (
-- Safe Bulkers
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth significantly trails the industry average of 57.8%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for SAFE BULKERS INC is currently very high, coming in at 78.70%. Regardless of SB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SB's net profit margin of 49.00% significantly outperformed against the industry.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Marine industry average. The net income has decreased by 20.9% when compared to the same quarter one year ago, dropping from $27.31 million to $21.61 million.
- The debt-to-equity ratio of 1.25 is relatively high when compared with the industry average, suggesting a need for better debt level management.
Safe Bulkers, Inc. provides marine drybulk transportation services worldwide. The company transports various bulk cargoes, primarily coal, grain, and iron ore. As of October 7, 2011, it had a fleet consisted of 17 drybulk vessels. The company has a P/E ratio of 4.6, below the average transportation industry P/E ratio of 5.5 and below the S&P 500 P/E ratio of 17.7. Safe Bulkers has a market cap of $501.3 million and is part of the
industry. Shares are up 7.8% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff