Stock Alert for OceanFreight Inc. ($OCNF)(D*)
OceanFreight Inc. (NASDAQ: OCNF)(D*)
* Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.
OceanFreight Inc. (OCNF) is a global provider of shipping transportation services. The Company specializes in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials and crude oil cargoes through the ownership and operation of nine drybulk carriers and four tanker vessels. During the year ended December 31, 2006, the fleet of the Company consisted of eight Panamax and one Capesize drybulk carriers and three Aframax and one Suezmax tanker vessels with a total capacity of 1.2 million dead weight tons (dwt) and an average age of 13.9 years.
OceanFreight Inc. was founded in 2006 and is based in Athens, Greece.
| Share Statistics (13-May-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | OCNF | Revenue, $Mn | 36.13M | 147.1M | 307.1% | 36.27M | 28.23M | 22.2% |
| Current price | $0.72 | Gross marg. | 69.1% | 72.4% | 4.8% | 27.7% | 43.4% | 56.7% |
| 52wk Range: | $2.10-0.51 | Oper. margin | 28.2% | 38.5% | 36.5% | 30.6% | -467.5% | 1627% |
| Avg Vol (3m): | 2,173,070 | Net margin | 22.6% | 18.8% | 16.8% | -31.9% | -478.9% | 1401% |
| Market Cap. | 102.67M | |||||||
| Dil. Shares Outst. | 406.92M | EPS, $ | 0.78 | 1.94 | 148.7% | 0-0.65 | -0.98 | 50.8% |
Source: Reuters.com, SEC Filings.
Financial Summary
OCNF, a global provider of marine transportation services, announced its financial results for the quarter ended March 31, 2010.
Financial Highlights
For the three-month period ended March 31, 2010, the Company reported a net income of $2.03 million or basic and diluted earnings per share of $0.01. EBITDA excluding vessel sale results for the quarter amounted to $14.3 million.
Result of steps taken during 2009 to restore the Company’s balance sheet and operations:
- OCNF raised equity needed to shore up its balance sheet.
- ONCF disposed aged assets thereby improving operational efficiency.
- OCNF deployed the equity raised and the available credit lines from the vessel sales to invest in modern assets with accretive earnings.
- OCNF set a foundation for long-term growth with the order of three Very Large Ore Carriers to focus on the expanding Brazil to China iron ore trade.
Recent Developments
- On March 13, 2010, OCNF agreed to sell the M/T Olinda to a third party for a gross sale price of $19.00 million. The vessel is scheduled for delivery to the new owners no later than December 31, 2010.
- On April 14, 2010, OCNF delivered to her new owners the M/V Pierre, which was committed for sale on December 11, 2009.
- On April 20, 2010, OCNF agreed to sell the M/T Tigani to a third party for a gross sale price of $12.25 million. The vessel was delivered to its new owners on May 4, 2010. Of the sale proceeds, $8.6 million was used to partially repay the vessel’s loan with DVB Bank SE. The sale resulted in a gain of $2.5 million of which approximately $1.0 million has been recognized in this quarter and $1.5 million will be recognized in the second quarter of 2010.
First Quarter 2010 Results
For the first quarter ended March 31, 2010, voyage revenue amounted to $28.8 million. Operating income amounted to $7.1 million and net income amounted to $2.03 million or $0.01 per share.
Adjusted EBITDA for the first quarter of 2010 was $14.3 million.
An average of 13 vessels were owned and operated during the first quarter of 2010, earning an average Time Charter Equivalent, or TCE rate, of $21,163 per day.
Capitalization
On March 31, 2010, debt (debt, net of deferred financing fees) to total capitalization (debt and stockholders’ equity) was 47.9% and net debt (debt less cash, cash equivalents and restricted cash) to total capitalization was 39.4%.
Financing
Following the sale of the M/T Tigani, $8.6 million of the sale proceeds were utilized to repay the outstanding balance of the vessel’s loan. As of the date of this release the aggregate outstanding balance of the Company’s loans is $236.8 million.
The Company has not raised any new equity since its last earnings report on February 22, 2010.
Liquidity
As of March 31, 2010, the Company had total liquidity of approximately $45.3 million.
| Financial Strength (13-May-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 1.35 | 1.11 | 1.49 | 0.78 |
| Current Ratio (MRQ) | 1.37 | 1.23 | 1.83 | 0.93 |
| Long-Term Debt to Equity (MRQ) | 84.07 | 111.98 | 86.67 | 129.93 |
| Total Debt to Equity (MRQ) | 103.53 | 134.16 | 113.47 | 196.32 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst one polled investment analysts. Against the OceanFreight Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 0 | 0 | 1 | 0 | 0 | 0 |
| 4 weeks ago | 0 | 0 | 1 | 0 | 0 | 0 |
| 2 months ago | 0 | 0 | 1 | 0 | 0 | 0 |
| 3 months ago | 0 | 0 | 1 | 0 | 0 | 0 |
| Last year | 0 | 0 | 2 | 0 | 0 | 0 |
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Year Ending Dec-10 | 1 | 118.70 | 118.70 | 118.70 | 116.49 |
| Year Ending Dec-11 | 1 | 108.50 | 108.50 | 108.50 | – |
| EARNINGS (per share) | |||||
| Quarter Ending Jun-10 | 1 | 0.01 | 0.01 | 0.01 | -0.06 |
| Quarter Ending Sep-10 | 1 | 0.00 | 0.00 | 0.00 | -0.15 |
| Year Ending Dec-10 | 1 | 0.02 | 0.02 | 0.02 | -0.35 |
| Year Ending Dec-11 | 1 | 0.01 | 0.01 | 0.01 | – |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=OCNF.W
Investment Highlights
2009 highlights include:
The sale of four drybulk vessels with an average age of 15 years
Purchased four drybulk capsize vessels with an average of four years
Reduced the average age of the fleet by 25%
Secured approximately $177 million in future revenues for 2010-2012
Achieved substantial time charter contract coverage: 75% in 2010, 45% in 2011
Adjusted EBITDA of $55.50 million
The Company said it primarily focuses on the drybulk and tanker segments because the acquisition and employment contracts of these vessels satisfy its financial and operating criteria. OCNF intends to explore acquisitions in other seaborne transportation sectors, as opportunities arise, that also meet the Company’s financial and operating criteria.
OCNF believes that monitoring developments in multiple sectors will position the Company the opportunistically select vessels in different sectors for acquisition and vessel employment opportunities as conditions in those sectors dictate. This outlook enables the Company to lower its dependence on any one shipping sector as it seeks to generate revenues and find attractive acquisition opportunities.
As of January 1, 2010, total newbuilding orders had been placed for an aggregate of about 59.3 % of the existing global drybulk fleet, with deliveries expected during the next 36 months. According to market sources about 50% of the drybulk fleet is contracted at established yards, while the other 50% is contracted at yards that are less established and whose viability may be uncertain.
Due to lack of financing many analysts, expect that newbuilding orders may experience significant cancellations and/or slippage, defined as the difference between newbuilding deliveries ordered versus actually delivered. Market sources indicate that slippage in the Handysize sector is about 50% and about 20% in the Capesize sector. The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or accidental losses.
On December 31, 2009, the Company’s current assets totaled $100.3 million while current liabilities totaled $73.3 million, resulting in a positive working capital position of $27.0 million. Based on its fixed-rate charters, the Company said it believes it will generate sufficient cash during 2010 to make the required principal and interest payment on our indebtedness, provide for normal working capital requirements and remain in a positive cash position in 2010.
If OCNF does acquire additional vessels, it will rely on new debt, proceeds from future offerings and revenues from operations to meet liquidity needs going forward.
Source: http://www.oceanfreightinc.com/files/ocnfar2010.pdf
Technical Analysis
Source: http://stockcharts.com
OCNF is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.
OCNF’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, OCNF is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
The MACD for OCNF currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| May-13-2010 | symbol | Share, $ | $ Mn | 2009 | 2010 | 2009 | 2010 |
| Euroseas Ltd | ESEA | 3.90 | 120.31M | n/a | n/a | 1.75 | n/a |
| Paragon Shipping Inc. | PRGN | 4.56 | 233.62M | 3.50 | n/a | 1.50 | n/a |
| Seanergy Maritime Holdings Corp | SHIP | 1.38 | 45.89M | 1.11 | n/a | 0.50 | n/a |
| Marine Bulk Carrier Median | 133.27M | n/a | n/a | 1.25 | n/a | ||
| OceanFreight Inc. | OCNF | 0.72 | 102.67M | n/a | n/a | 0.76 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | n/a |
| Sales | n/a | n/a |
| Net Shares Purchased (Sold) | n/a | n/a |
| Total Insider Shares Held | n/a | n/a |
| % Net Shares Purchased (Sold) | n/a | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | n/a |
| % Change in Institutional Shares Held | n/a |
Source: Yahoo Finance
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