3 Stocks Pushing The Transportation Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

The Transportation industry as a whole closed the day down 1.0% versus the S&P 500, which was down 0.6%. Laggards within the Transportation industry included China Metro-Rural Holdings ( CNR), down 3.7%, Air T ( AIRT), down 2.7%, Danaos ( DAC), down 2.2%, Radiant Logistics ( RLGT), down 1.6% and Global Ship Lease ( GSL), down 1.5%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Danaos ( DAC) is one of the companies that pushed the Transportation industry lower today. Danaos was down $0.13 (2.2%) to $5.82 on light volume. Throughout the day, 4,131 shares of Danaos exchanged hands as compared to its average daily volume of 17,600 shares. The stock ranged in price between $5.82-$5.90 after having opened the day at $5.85 as compared to the previous trading day's close of $5.95.

Danaos Corporation, together with its subsidiaries, is engaged in the ownership and operation of containerships, as well as chartering of its vessels to liner companies in Greece and internationally. It primarily offers seaborne transportation services. Danaos has a market cap of $651.4 million and is part of the services sector. Shares are up 21.4% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Danaos a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Danaos as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk and weak operating cash flow.

Highlights from TheStreet Ratings analysis on DAC go as follows:

  • 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 37.4% when compared to the same quarter one year ago, falling from $13.43 million to $8.41 million.
  • The debt-to-equity ratio is very high at 5.02 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to $39.30 million or 19.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Marine industry and the overall market, DANAOS CORP's return on equity is below that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, DAC's share price has jumped by 32.64%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

You can view the full analysis from the report here: Danaos Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Air T ( AIRT) was down $0.33 (2.7%) to $11.86 on heavy volume. Throughout the day, 35,961 shares of Air T exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in price between $11.60-$12.21 after having opened the day at $12.21 as compared to the previous trading day's close of $12.19.

Air T, Inc., through its subsidiaries, provides overnight air cargo, ground equipment sales, and ground support services in the United States and internationally. Air T has a market cap of $28.8 million and is part of the services sector. Shares are up 1.8% year-to-date as of the close of trading on Thursday.

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TheStreet Ratings rates Air T as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on AIRT go as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • AIRT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, AIRT has a quick ratio of 1.98, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Air Freight & Logistics industry average. The net income increased by 6.1% when compared to the same quarter one year prior, going from $0.39 million to $0.42 million.
  • AIRT, with its decline in revenue, underperformed when compared the industry average of 3.4%. Since the same quarter one year prior, revenues fell by 17.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

You can view the full analysis from the report here: Air T Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

China Metro-Rural Holdings ( CNR) was another company that pushed the Transportation industry lower today. China Metro-Rural Holdings was down $0.04 (3.7%) to $0.90 on light volume. Throughout the day, 1,000 shares of China Metro-Rural Holdings exchanged hands as compared to its average daily volume of 20,500 shares. The stock ranged in price between $0.89-$0.92 after having opened the day at $0.91 as compared to the previous trading day's close of $0.94.

China Metro-Rural Holdings has a market cap of $67.7 million and is part of the services sector. Shares are up 2.2% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates China Metro-Rural Holdings a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from TheStreet Ratings analysis on CNR go as follows:

You can view the full analysis from the report here: China Metro-Rural Holdings Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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