NEW YORK ( TheStreet) -- Rand Logistics (Nasdaq: RLOG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity and feeble growth in its earnings per share. Highlights from the ratings report include:
- Compared to its closing price of one year ago, RLOG's share price has jumped by 52.89%, exceeding the performance of the broader market during that same time frame. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.
- RAND LOGISTICS INC's earnings per share declined by 35.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RAND LOGISTICS INC swung to a loss, reporting -$0.13 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.13).
- 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, RAND LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Currently the debt-to-equity ratio of 1.95 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.25, which clearly demonstrates the inability to cover short-term cash needs.
- 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 44.8% when compared to the same quarter one year ago, falling from -$8.84 million to -$12.81 million.