Dallas, Texas 01/16/2014 (FINANCIALSTRENDS) – The stock of the $113 million market capped Genco Shipping & Trading Limited (NYSE:GNK) posted a big 13.9 percent increase in market value during trading yesterday. While it is difficult to put once finger on the specific reasons that promoted this huge market rally on the stock, the underlying weakness that the transporter of dry bulk cargo has been displaying in its operations in the past few quarters cannot be discounted.
In the past 12 months, Genco Shipping & Trading Limited (NYSE:GNK) has accumulated huge losses adding up to $174 million. It’s total sales in the same trailing 12 months period was $194 million. It’s operating margin for the same 12 month period is down 49.8 percent. These structural and operational weaknesses had resulted in the investor community staying away from this stock. This had in turn rendered the stock down 20.3 percent during trading last quarter and by an even bigger 32 percent during trading in the past 12 months.
These recessionary trends displayed by the New York based dry cargo carrier have been mirrored by the larger “dry bulk shipping” industry over the past few months. In fact one of the key shipping industry report “The Baltic Dry Index” had published a report last week, in which it had reported a steady dip in the shipping activity and hence the rental rates at which these shipping firms hire out their cargo ships over the past few weeks.
The Baltic Dry Index had reported that the shipping activity across the major sea lanes of the world had seen a sequential drop on a day to day basis from the start of 2014. On this disturbing report becoming public, a host of shipping firm stocks tanked during trading on 10th January. The bear hug had pulled down Genco Shipping & Trading Limited (NYSE:GNK) stock too by a substantial 8 percent during trading on 10th January.