Back to top

Image: Bigstock

Pangaea Logistics Solutions Ltd. (PANL) Soars to 52-Week High, Time to Cash Out?

Read MoreHide Full Article

Have you been paying attention to shares of Pangaea Logistics (PANL - Free Report) ? Shares have been on the move with the stock up 41.1% over the past month. The stock hit a new 52-week high of $6.63 in the previous session. Pangaea Logistics has gained 75.4% since the start of the year compared to the -13.8% move for the Zacks Transportation sector and the 38.4% return for the Zacks Transportation - Shipping industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 10, 2022, Pangaea Logistics reported EPS of $0.35 versus consensus estimate of $0.32 while it missed the consensus revenue estimate by 0.56%.

For the current fiscal year, Pangaea Logistics is expected to post earnings of $1.66 per share on $756.08 million in revenues. This represents a 18.44% change in EPS on a 5.29% change in revenues. For the next fiscal year, the company is expected to earn $2.12 per share on $778.63 million in revenues. This represents a year-over-year change of 27.25% and 2.98%, respectively.

Valuation Metrics

Pangaea Logistics may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Pangaea Logistics has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 4.5X. On a trailing cash flow basis, the stock currently trades at 3.5X versus its peer group's average of 3.7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Pangaea Logistics currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Pangaea Logistics meets the list of requirements. Thus, it seems as though Pangaea Logistics shares could still be poised for more gains ahead.

How Does PANL Stack Up to the Competition?

Shares of PANL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Golden Ocean Group Limited (GOGL - Free Report) . GOGL has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of A.

Earnings were strong last quarter. Golden Ocean Group Limited beat our consensus estimate by 51.43%, and for the current fiscal year, GOGL is expected to post earnings of $2.44 per share on revenue of $941.9 million.

Shares of Golden Ocean Group Limited have gained 34.7% over the past month, and currently trade at a forward P/E of 6.43X and a P/CF of 3.49X.

The Transportation - Shipping industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PANL and GOGL, even beyond their own solid fundamental situation.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Golden Ocean Group Limited (GOGL) - free report >>

Pangaea Logistics Solutions Ltd. (PANL) - free report >>

Published in