NEW YORK (TheStreet) -- Box Ships TEU was falling 21.4% to $1.87 Thursday following the pricing of a 5 million unit public offering.
The shipping company announced it will offer the 5 million units, consisting of common shares and warrants at $2.05 a unit. Each unit consists of a common share and a warrant to purchase 0.4 common shares. The warrants have an exercise price of $2.65, can be exercised immediately, and expire on Apri 10, 2019.
Box ships plans to use the proceeds from the offering for general corporate purposes, which may include debt repayment and the purchase of vessels.
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TheStreet Ratings team rates BOX SHIPS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOX SHIPS INC (TEU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BOX SHIPS INC's earnings per share declined by 9.1% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BOX SHIPS INC reported lower earnings of $0.46 versus $0.58 in the prior year.
- Net operating cash flow has decreased to $7.85 million or 25.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Looking at the price performance of TEU's shares over the past 12 months, there is not much good news to report: the stock is down 48.70%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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 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. When compared to other companies in the Marine industry and the overall market, BOX SHIPS INC's return on equity is below that of both the industry average and the S&P 500.
- TEU, with its decline in revenue, underperformed when compared the industry average of 9.5%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: TEU Ratings Report