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 upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 27.6%. 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.
- Compared to its closing price of one year ago, SB's share price has jumped by 82.78%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for SAFE BULKERS INC is currently very high, coming in at 79.02%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 52.42% significantly outperformed against the industry average.
- SB's debt-to-equity ratio of 0.88 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.75 is very high and demonstrates very strong liquidity.
- 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. Compared to other companies in the Marine industry and the overall market on the basis of return on equity, SAFE BULKERS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
Safe Bulkers, Inc., a marine drybulk transportation services company, engages in the acquisition, ownership, and operation of drybulk vessels worldwide. The company transports various bulk cargoes, primarily coal, grain, and iron ore. As of March 14, 2013, it had a fleet of 25 drybulk vessels. Safe Bulkers has a market cap of $744.3 million and is part of the services sector and transportation industry. Shares are down 13.9% year to date as of the close of trading on Wednesday.
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