NEW YORK ( TheStreet) -- Paragon Shipping (NYSE: PRGN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • PARAGON SHIPPING INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, PARAGON SHIPPING INC reported lower earnings of $0.44 versus $1.85 in the prior year. For the next year, the market is expecting a contraction of 38.6% in earnings ($0.27 versus $0.44).
  • 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 329.6% when compared to the same quarter one year ago, falling from $7.31 million to -$16.78 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Marine industry and the overall market on the basis of return on equity, PARAGON SHIPPING INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 64.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 300.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The gross profit margin for PARAGON SHIPPING INC is currently very high, coming in at 75.20%. Regardless of PRGN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PRGN's net profit margin of -70.90% significantly underperformed when compared to the industry average.

Paragon Shipping Inc. provides shipping transportation services worldwide. The company engages in the ocean transportation of various drybulk cargoes and containers. The company has a P/E ratio of 43.3, above the S&P 500 P/E ratio of 17.7. Paragon Shipping has a market cap of $77.8 million and is part of the services sector and transportation industry. Shares are down 62.7% year to date as of the close of trading on Monday.

You can view the full Paragon Shipping Ratings Report or get investment ideas from our investment research center.
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