GulfMark Offshore Inc. Stock Downgraded (GLF)

NEW YORK ( TheStreet) -- GulfMark Offshore (NYSE: GLF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.2%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 126.56% to $11.42 million when compared to the same quarter last year. In addition, GULFMARK OFFSHORE INC has also vastly surpassed the industry average cash flow growth rate of -7.46%.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that GLF's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.24 is high and demonstrates strong liquidity.
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 149.3% when compared to the same quarter one year ago, falling from -$1.17 million to -$2.91 million.
  • The share price of GULFMARK OFFSHORE INC has not done very well: it is down 17.80% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

GulfMark Offshore, Inc. provides offshore marine support and transportation services primarily to companies involved in the offshore exploration and production of oil and natural gas. The company has a P/E ratio of 18.3, below the average energy industry P/E ratio of 18.4 and above the S&P 500 P/E ratio of 17.7. GulfMark has a market cap of $911.4 million and is part of the basic materials sector and energy industry. Shares are down 19.1% year to date as of the close of trading on Tuesday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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