When Seanergy Maritime Holdings Corp (NASDAQ:SHIP) released its most recent earnings update (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Seanergy Maritime Holdings’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SHIP actually performed well. Below is a quick commentary on how I see SHIP has performed. See our latest analysis for Seanergy Maritime Holdings
Were SHIP’s earnings stronger than its past performances and the industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to examine different companies on a similar basis, using the most relevant data points. For Seanergy Maritime Holdings, its latest trailing-twelve-month earnings is -US$3.23M, which, relative to the previous year’s level, has become less negative. Given that these values may be relatively short-term thinking, I have estimated an annualized five-year figure for Seanergy Maritime Holdings’s net income, which stands at -US$50.31M. This means although net income is negative, it has become less negative over the years.
We can further assess Seanergy Maritime Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Seanergy Maritime Holdings has seen an annual decline in revenue of -20.38%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the US shipping industry has been growing, albeit, at a muted single-digit rate of 2.84% over the past year, and a flatter -0.76% over the past half a decade. This means that although Seanergy Maritime Holdings is currently unprofitable, any recent headwind the industry is facing, Seanergy Maritime Holdings is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most useful step is to assess company-specific issues Seanergy Maritime Holdings may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Seanergy Maritime Holdings to get a better picture of the stock by looking at:
- 1. Financial Health: Is SHIP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.