Eagle Bulk Shipping Downgraded

By TheStreet Ratings Staff
Eagle Bulk Shipping -- Common Stock


Reviewed by TheStreet Ratings on .


TheStreet Ratings reiterates its sell rating on Eagle Bulk Shipping.


Eagle Bulk Shipping's gross profit margin for the fourth quarter of its fiscal year 2011 has significantly increased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. Eagle Bulk Shipping has weak liquidity. Currently, the Quick Ratio is 0.58 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.


During the same period, stockholders' equity ("net worth") has remained unchanged from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.


Rating: 1 of 5, "D" sell.



INCOME STATEMENT Q4 FY11 Q4 FY10
Net Sales ($mil) 70.01 72.35
EBITDA ($mil) 28.03 0.0
EBIT ($mil) 9.15 14.85
Net Income ($mil) -1.7 3.03


BALANCE SHEET Q4 FY11 Q4 FY10
Cash & Equiv. ($mil) 26.06 129.12
Total Assets ($mil) 1867.26 1896.57
Total Debt ($mil) 1129.48 1151.35
Equity ($mil) 674.18 669.09


PROFITABILITY Q4 FY11 Q4 FY10
Gross Profit Margin 50.52 33.06
EBITDA Margin 40.03 0.0
Operating Margin 13.07 20.53
Sales Turnover 0.17 0.14
Return on Assets -0.79 1.42
Return on Equity -2.2 4.01
DEBT Q4 FY11 Q4 FY10
Current Ratio 0.81 4.94
Debt/Capital 0.63 0.63
Interest Expense 0.0 13.34
Interest Coverage 0.0 1.11


SHARE DATA Q4 FY11 Q4 FY10
Shares outstanding (mil) 63.0 62.56
Div / share 0.0 0.0
EPS -0.03 0.05
Book value / share 10.7 10.7
Institutional Own % n/a n/a
Avg Daily Volume 994564.0 608169.0

Valuation


SELL. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 0.15 indicates a significant discount versus the S&P 500 average of 2.26 and a significant discount versus the industry average of 1.70. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, EAGLE BULK SHIPPING INC proves to trade at a discount to investment alternatives within the industry.


PRICE/EARNINGS
1 2 3 4 5
PREMIUM   DISCOUNT
  PRICE/CASH FLOW
1 2 3 4 5
PREMIUM   DISCOUNT
EGLE NM Peers 20.40   EGLE 1.73 Peers 11.09

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

EGLE's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

EGLE is trading at a significant discount to its peers.

 
PRICE/PROJECTED
EARNINGS
1 2 3 4 5
PREMIUM   DISCOUNT
  PRICE TO
EARNINGS/GROWTH
1 2 3 4 5
PREMIUM   DISCOUNT
EGLE NM Peers 15.59   EGLE NA Peers 1.02

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

EGLE's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
PRICE/BOOK
1 2 3 4 5
PREMIUM   DISCOUNT
  EARNINGS GROWTH
1 2 3 4 5
LOWER   HIGHER
EGLE 0.15 Peers 1.70   EGLE -153.48 Peers -25.08

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

EGLE is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, EGLE is expected to significantly trail its peers on the basis of its earnings growth rate.

 
PRICE/SALES
1 2 3 4 5
PREMIUM   DISCOUNT
  SALES GROWTH
1 2 3 4 5
PREMIUM   DISCOUNT
EGLE 0.32 Peers 1.98   EGLE 18.26 Peers 55.38

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

EGLE is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

EGLE significantly trails its peers on the basis of sales growth