Why Tsakos Energy (TNP) Spiked on Friday

NEW YORK (TheStreet) -- Tsakos Energy (TNP) closed Friday higher after UBS initiated coverage.

By market close, shares had added 7% to $7.01.

UBS initiated coverage of the deep sea freighter with a "buy" rating and a $9 price target.

In the report, analyst Joshua Katzeff said the Greece-based shipper had "diversified exposure fairly evenly split between crude and product tankers."

"Although TNP owns a seemingly diversified fleet of crude, product, LNG and shuttle tankers, the company's core exposure is in the more commoditized crude and product tanker segments. Given our bullish outlook on crude and product, we view TNP's 0.98x P/NAV, the lowest in our tanker sector, as a highly attractive entry point," said Katzeff.

The investment firm anticipates revenue of $288 million for fiscal 2014 with a net loss of 13 cents a share.

Analysts surveyed by Thomson Reuters forecast revenue of $288.68 million and a net loss of 16 cents a share.

The company is due to report fourth-quarter and full-year earnings before the bell March 17. 

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TheStreet Ratings team rates TSAKOS ENERGY NAVIGATION LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TSAKOS ENERGY NAVIGATION LTD (TNP) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

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

  • The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 16.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 77.77% and other important driving factors, this stock has surged by 82.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • 40.80% is the gross profit margin for TSAKOS ENERGY NAVIGATION LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.26% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TSAKOS ENERGY NAVIGATION LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, TNP maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.

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