Back to top

Image: Bigstock

Costamare (CMRE) Soars to 52-Week High, Time to Cash Out?

Read MoreHide Full Article

Shares of Costamare (CMRE) have been strong performers lately, with the stock up 17.5% over the past month. The stock hit a new 52-week high of $8.96 in the previous session. Costamare has gained 101.6% since the start of the year compared to the 15.9% move for the Zacks Transportation sector and the 21.8% 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 October 23, 2019, Costamare reported EPS of $0.26 versus consensus estimate of $0.19 while it beat the consensus revenue estimate by 6.14%.

For the current fiscal year, Costamare is expected to post earnings of $0.88 per share on $470.53 million in revenues. This represents a 109.52% change in EPS on a 23.69% change in revenues. For the next fiscal year, the company is expected to earn $0.93 per share on $487.99 million in revenues. This represents a year-over-year change of 5.68% and 3.71%, respectively.

Valuation Metrics

Costamare 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 has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

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

In terms of its value breakdown, the stock currently trades at 10.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 5.3X versus its peer group's average of 4.2X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Costamare 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 Costamare meets the list of requirements. Thus, it seems as though Costamare shares could have a bit more room to run in the near term.

How Does Costamare Stack Up to the Competition?

Shares of Costamare have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Costamare (CMRE), Seanergy Maritime Holdings (SHIP), and Navios Maritime Partners (NMM - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 13% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Costamare, even beyond its own solid fundamental situation.

In-Depth Zacks Research for the Tickers Above

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

Navios Maritime Partners LP (NMM) - free report >>

Published in