NEW YORK ( TheStreet) -- Navios Maritime Acquisition (NYSE: NNA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally weak debt management and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 94.1% when compared to the same quarter one year ago, falling from -$0.41 million to -$0.79 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% 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 debt-to-equity ratio is very high at 4.12 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, NNA's quick ratio is somewhat strong at 1.02, demonstrating the ability to handle short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NAVIOS MARITIME ACQUISITION's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NAVIOS MARITIME ACQUISITION is currently very high, coming in at 97.10%. Regardless of NNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NNA's net profit margin of -2.20% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff