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"We rate DIANA SHIPPING INC (DSX) 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 disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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, DIANA SHIPPING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $11.61 million or 32.33% when compared to the same quarter last year. Despite a decrease in cash flow DIANA SHIPPING INC is still fairing well by exceeding its industry average cash flow growth rate of -53.73%.
- DSX'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 50.12%, 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.
- 45.59% is the gross profit margin for DIANA SHIPPING INC which we consider to be strong. Regardless of DSX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DSX's net profit margin of 17.14% compares favorably to the industry average.
- DIANA SHIPPING INC 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, DIANA SHIPPING INC swung to a loss, reporting -$0.26 versus $0.67 in the prior year. This year, the market expects an improvement in earnings (-$0.17 versus -$0.26).
- You can view the full analysis from the report here: DSX Ratings Report
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