NEW YORK ( TheStreet) -- Genco Shipping & Trading (NYSE: GNK) 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, weak operating cash flow and generally weak debt management. Highlights from the ratings report include:
- GENCO SHIPPING & TRADING 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, GENCO SHIPPING & TRADING reported lower earnings of $0.72 versus $4.11 in the prior year. For the next year, the market is expecting a contraction of 355.6% in earnings (-$1.84 versus $0.72).
- 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 99.1% when compared to the same quarter one year ago, falling from $34.81 million to $0.31 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, GENCO SHIPPING & TRADING underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has decreased to $36.85 million or 49.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 98.88% 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.
-- Written by a member of TheStreet Ratings Staff