Dry Bulk Shippers Sink on Index Data

NEW YORK (TheStreet) -- DryShips (DRYS), Navios Maritime Holdings (NM) and Baltic Trading (BALT) tumbled over Friday's session after the Baltic Dry Index dropped. The Index, which measures activity along the world's major shipping routes, dropped around 11% to 1,512 on Friday.

Capesize shipping rates for vehicles which can carry 150,000 metric tons of cargo or higher tanked 27.5% to $17,452 a day.

Lower demand for deep sea freighters hurt DryShips' share value over Friday. By early afternoon, the Greece-based business had fallen 3.6% to $3.78.

Small-cap Navios Maritime Holdings took off 5.6% to $9.15, while Baltic Trading slipped 1.5% to $6.06.

TheStreet Ratings team rates DRYSHIPS INC as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate DRYSHIPS INC (DRYS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DRYS's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 17.8%. 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.
  • Compared to its closing price of one year ago, DRYS's share price has jumped by 162.80%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The gross profit margin for DRYSHIPS INC is rather high; currently it is at 55.52%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -15.77% is in-line with the industry average.
  • 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, DRYSHIPS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $48.85 million or 40.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

TheStreet Ratings team rates NAVIOS MARITIME HOLDINGS INC as a Hold with a ratings score of C+. The team has this to say about their recommendation:

"We rate NAVIOS MARITIME HOLDINGS INC (NM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, NM's share price has jumped by 206.91%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The revenue fell significantly faster than the industry average of 8.9%. Since the same quarter one year prior, revenues fell by 25.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 381.8% when compared to the same quarter one year ago, falling from $4.63 million to -$13.05 million.
  • The gross profit margin for NAVIOS MARITIME HOLDINGS INC is currently lower than what is desirable, coming in at 28.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.67% is significantly below that of the industry average.

TheStreet Ratings team rates BALTIC TRADING LTD as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate BALTIC TRADING LTD (BALT) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 44.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 14.58, which clearly demonstrates the ability to cover short-term cash needs.
  • 49.74% is the gross profit margin for BALTIC TRADING LTD which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -24.95% is in-line with the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Marine industry and the overall market, BALTIC TRADING LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.81 million or 2914.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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