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"We rate BALTIC TRADING LTD (BALT) a SELL. This is driven by a few notable 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 unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."
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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 Marine industry. The net income has significantly decreased by 140.2% when compared to the same quarter one year ago, falling from -$2.27 million to -$5.46 million.
- Net operating cash flow has significantly decreased to -$1.83 million or 124.20% 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 BALT's shares over the past 12 months, there is not much good news to report: the stock is down 54.06%, 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. Compared to other companies in the Marine industry and the overall market, BALTIC TRADING LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- 40.79% is the gross profit margin for BALTIC TRADING LTD which we consider to be strong. Regardless of BALT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BALT's net profit margin of -54.33% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: BALT Ratings Report
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