Euroseas Limited: Zacks Rank Buy
Euroseas saw revenues surge 121.5% as commodities demand continues to be strong worldwide.
The company has surprised on earnings 4 consecutive quarters by an average of 10.39%. Euroseas has a forward P/E of just 7.15. Company Description Euroseas Limited is a worldwide dry cargo, drybulk and container shipper.
The company, headquartered in Athens, Greece, markets its vessels on spot and period charters and also through pool arrangements.
ESEA has a fleet of 16 vessels, including 3 Panamax drybulk carriers, 2 Handysize drybulk carriers, 3 Intermediate container ships, 5 Handysize container ships, 2 Feeder container ships and 1 multipurpose dry cargo vessel.
Euroseas Surprises on Estimates by 2.33%
On Aug 14, Euroseas reported is second quarter earnings and beat Wall Street estimates by a penny. Net income was $15.7 million, or 52 cents per share, compared to $6.4 million in the second quarter of 2007.
Excluding the effect on the earnings from the amortization of the fair value of time charter contracts acquired, earnings per share were 44 cents per share compared to 38 cents per share a year ago. Analysts had expected 43 cents per share.
Revenues jumped 121.5% to $34.5 million from $15.6 million in the year ago period.
During the second quarter, the company expanded its fleet by one vessel after it acquired an intermediate container vessel in May 2008 for $43.5 million. The vessel is already under a term charter until August 2011 at a rate of $16,800 per day.
The fleet was nearly fully operational during the quarter, with an average of 15.44 vessels operating and earning an average time charter equivalent rate of $25,918 per day compared to operating 10.08 vessels at the average of $18,776 per day in the second quarter of 2007.
For the remainder of 2008, Euroseas' fleet is 80% fixed under period charters, already concluded spot charters, or somehow protected from market fluctuations. For 2009, 34% of ESEA's capacity is under time charter contracts or protected from market fluctuations.
ESEA Raises Second Quarter Dividend
On Aug 8, Euroseas declared a dividend of 32 cents per share for the second quarter of 2008, 7 cents higher than the dividend paid in the second quarter of 2007. It is payable on Sep 17 to shareholders of record as of Sep 5.
The dividend grew 29% in the first six months of 2008 to 63 cents per share from 49 cents per share in the year ago period. Currently, the stock has a yield of 9.30%.
Consensus Estimates Rise for the Full Year
Responding to another earnings surprise, 2 out of 4 covering analysts have raised full year estimates in the last 30 days, although one analyst has also lowered estimates as well. Consensus estimates for the year are up 9 cents to $1.96 from $1.87 per share in the last 60 days. For the third quarter, estimates are unchanged at 50 cents per share in the last 2 months.
Euroseas is a Zacks #1 Rank (Strong Buy) stock. It has a forward P/E of only 7.15, under the industry average of 11.03. Its price-to-book is 1.42. The company has an excellent one year return on equity (ROE) of 17.93%.
Source: Zacks web site