3 Stocks Pushing The Transportation Industry Lower

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The Transportation industry as a whole closed the day down 1.5% versus the S&P 500, which was down 1.6%. Laggards within the Transportation industry included Rand Logistics ( RLOG), down 2.6%, Patriot Transportation Holdings ( PATR), down 2.0%, FreeSeas ( FREE), down 7.5%, Diana Containerships ( DCIX), down 3.8% and ModusLink Global Solutions ( MLNK), 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 $0.02 (7.5%) to $0.23 on heavy volume. Throughout the day, 5,855,199 shares of FreeSeas exchanged hands as compared to its average daily volume of 1,679,100 shares. The stock ranged in price between $0.22-$0.27 after having opened the day at $0.27 as compared to the previous trading day's close of $0.25.

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 $8.6 million and is part of the services sector. Shares are down 89.9% year-to-date as of the close of trading on Wednesday.

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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 87.31%, 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 10.2%. 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, Patriot Transportation Holdings ( PATR) was down $0.69 (2.0%) to $33.73 on average volume. Throughout the day, 9,944 shares of Patriot Transportation Holdings exchanged hands as compared to its average daily volume of 11,300 shares. The stock ranged in price between $33.70-$34.31 after having opened the day at $34.21 as compared to the previous trading day's close of $34.42.

Patriot Transportation Holding, Inc., through its subsidiaries, is engaged in the transportation and real estate businesses in the United States. It operates in three segments: Transportation, Mining Royalty Land, and Developed Property Rentals. Patriot Transportation Holdings has a market cap of $324.5 million and is part of the services sector. Shares are down 17.1% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Patriot Transportation Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on PATR go as follows:

  • PATR's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 15.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PATR's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PATR's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash 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 Road & Rail industry average. The net income increased by 16.1% when compared to the same quarter one year prior, going from $3.00 million to $3.49 million.
  • PATRIOT TRANSN HOLDING INC has improved earnings per share by 16.1% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PATRIOT TRANSN HOLDING INC increased its bottom line by earning $1.60 versus $0.81 in the prior year. For the next year, the market is expecting a contraction of 28.1% in earnings ($1.15 versus $1.60).
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

You can view the full analysis from the report here: Patriot Transportation Holdings Ratings Report

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Rand Logistics ( RLOG) was another company that pushed the Transportation industry lower today. Rand Logistics was down $0.15 (2.6%) to $5.55 on average volume. Throughout the day, 10,544 shares of Rand Logistics exchanged hands as compared to its average daily volume of 13,800 shares. The stock ranged in price between $5.50-$5.80 after having opened the day at $5.80 as compared to the previous trading day's close of $5.70.

Rand Logistics, Inc., through its subsidiaries, provides bulk freight shipping services in the Great Lakes region. The company offers domestic port-to-port services. Rand Logistics has a market cap of $102.5 million and is part of the services sector. Shares are down 1.2% year-to-date as of the close of trading on Wednesday. Currently there is 1 analyst who rates Rand Logistics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Rand Logistics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and poor profit margins.

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Highlights from TheStreet Ratings analysis on RLOG go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Marine industry. The net income has decreased by 20.1% when compared to the same quarter one year ago, dropping from $2.58 million to $2.06 million.
  • The debt-to-equity ratio is very high at 3.03 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, RLOG has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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, RAND LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RAND LOGISTICS INC is currently lower than what is desirable, coming in at 29.87%. Regardless of RLOG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.75% trails the industry average.
  • RLOG, with its decline in revenue, underperformed when compared the industry average of 10.2%. Since the same quarter one year prior, revenues fell by 10.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

You can view the full analysis from the report here: Rand Logistics 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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