NEW YORK (TheStreet) -- Shares of Globalstar (GSAT) were gaining 4.4% to $2.71 after the wireless communications company disclosed insider share purchases by the chairman and CEO, and a director at the company.
In an SEC filing Globalstar disclosed that chairman and CEO James Monroe III bought 175,000 shares of the company at $2.65 a share on Tuesday. Monroe also purchase 150,000 shares of the company on Monday at $2.59 a share. The CEO owns 453,801,477 shares of voting common stock following the two purchases.
Director John Kneuer purchased 15,500 shares of Globalstar at $2.66 a share on Monday, according to an SEC filing. Kneuer owns 80,500 shares of the company following the purchase.
TheStreet Ratings team rates GLOBALSTAR INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GLOBALSTAR INC (GSAT) a SELL. This is driven by multiple 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 deteriorating net income, poor profit margins, weak operating cash flow and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 243.5% when compared to the same quarter one year ago, falling from -$126.27 million to -$433.73 million.
- The gross profit margin for GLOBALSTAR INC is rather low; currently it is at 19.12%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1807.66% is significantly below that of the industry average.
- Net operating cash flow has decreased to -$1.45 million or 11.83% when compared to the same quarter last year. Despite a decrease in cash flow of 11.83%, GLOBALSTAR INC is in line with the industry average cash flow growth rate of -17.71%.
- GLOBALSTAR INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GLOBALSTAR INC reported poor results of -$0.96 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.80 versus -$0.96).
- Compared to its closing price of one year ago, GSAT's share price has jumped by 47.61%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GSAT do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: GSAT Ratings Report