3 Stocks Pushing The Transportation Industry Lower

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The Transportation industry as a whole closed the day down 0.7% versus the S&P 500, which was down 0.1%. Laggards within the Transportation industry included Euroseas ( ESEA), down 1.8%, Box Ships ( TEU), down 3.0%, FreeSeas ( FREE), down 13.9%, Eagle Bulk Shipping ( EGLE), down 2.6% and Universal Truckload Services ( UACL), down 1.6%.

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

FreeSeas ( FREE) is one of the companies that pushed the Transportation industry lower today. FreeSeas was down $0.05 (13.9%) to $0.31 on heavy volume. Throughout the day, 3,685,188 shares of FreeSeas exchanged hands as compared to its average daily volume of 1,185,700 shares. The stock ranged in price between $0.29-$0.38 after having opened the day at $0.38 as compared to the previous trading day's close of $0.36.

FreeSeas Inc., through its subsidiaries, provides drybulk shipping services. Its vessels carry various drybulk commodities, such as iron ore, grain, and coal, as well as bauxite, phosphate, fertilizers, steel products, cement, sugar, and rice. FreeSeas has a market cap of $14.0 million and is part of the services sector. Shares are down 84.9% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates FreeSeas as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from TheStreet Ratings analysis on FREE go as follows:

  • FREE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 47.81%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • FREE's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.11 is very low and demonstrates very weak liquidity.
  • The revenue fell significantly faster than the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 45.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Compared to other companies in the Marine industry and the overall market, FREESEAS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • FREESEAS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, FREESEAS INC continued to lose money by earning -$29.37 versus -$220.50 in the prior year.

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

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At the close, Box Ships ( TEU) was down $0.04 (3.0%) to $1.31 on light volume. Throughout the day, 74,381 shares of Box Ships exchanged hands as compared to its average daily volume of 137,300 shares. The stock ranged in price between $1.31-$1.34 after having opened the day at $1.34 as compared to the previous trading day's close of $1.35.

Box Ships Inc., a shipping company, is engaged in the seaborne transportation of containers worldwide. As of December 31, 2013, it had a fleet of 9 containerships with a total capacity of approximately 43,925 twenty-foot equivalent units. Box Ships has a market cap of $34.9 million and is part of the services sector. Shares are down 59.0% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Box Ships a buy, 2 analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Box Ships as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on TEU go as follows:

  • The gross profit margin for BOX SHIPS INC is rather high; currently it is at 64.66%. Regardless of TEU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.38% trails the industry average.
  • The revenue fell significantly faster than the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 27.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 on the basis of return on equity, BOX SHIPS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has decreased to $5.49 million or 44.31% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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

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Euroseas ( ESEA) was another company that pushed the Transportation industry lower today. Euroseas was down $0.02 (1.8%) to $1.12 on heavy volume. Throughout the day, 73,326 shares of Euroseas exchanged hands as compared to its average daily volume of 43,500 shares. The stock ranged in price between $1.11-$1.15 after having opened the day at $1.13 as compared to the previous trading day's close of $1.14.

Euroseas Ltd. provides ocean-going transportation services worldwide. It owns and operates dry bulk carriers that transport bulks, such as iron ore, coal, and grains, as well as bauxite, phosphate, and fertilizers. Euroseas has a market cap of $64.3 million and is part of the services sector. Shares are down 21.4% year-to-date as of the close of trading on Friday. Currently there are no analysts who rate Euroseas a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates Euroseas as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on ESEA go as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Marine industry and the overall market, EUROSEAS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EUROSEAS LTD is rather low; currently it is at 15.92%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -49.46% is significantly below that of the industry average.
  • ESEA has underperformed the S&P 500 Index, declining 8.60% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • EUROSEAS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EUROSEAS LTD reported poor results of -$2.27 versus -$0.39 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$2.27).
  • 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 ESEA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.72 is high and demonstrates strong liquidity.

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

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