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
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 solid stock price performance, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, SB's share price has jumped by 51.31%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for SAFE BULKERS INC is rather high; currently it is at 57.59%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SB's net profit margin of 27.16% significantly outperformed against the industry.
- SAFE BULKERS INC's earnings per share declined by 38.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SAFE BULKERS INC reported lower earnings of $1.05 versus $1.28 in the prior year. For the next year, the market is expecting a contraction of 41.9% in earnings ($0.61 versus $1.05).
- 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 30.1% when compared to the same quarter one year ago, falling from $16.07 million to $11.23 million.
Safe Bulkers, Inc. provides marine dry bulk transportation services worldwide. The company is involved in the acquisition, ownership, and operation of dry bulk vessels for transporting bulk cargoes, primarily coal, grain, and iron ore. Safe Bulkers has a market cap of $671.7 million and is part of the services sector and transportation industry. Shares are down 22.1% year to date as of the close of trading on Monday.
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