NEW YORK (TheStreet) -- Shares of Baltic Trading were falling 9.9% to $1.46 on heavy trading volume Wednesday following the announcement that Genco Shipping & Trading will acquire the shipping company. Baltic Trading is currently a subsidiary of Genco. Genco will acquire Baltic Trading in a stock-for-stock transaction, after which Baltic Trading will become an indirect wholly-owned subsidiary of Genco. Baltic Trading shareholder will receive 0.216 shares of Genco common stock for each share of Baltic Trading. The combined drybulk shipping company will own a combined fleet of 70 drybulk vessels with an average age of 8.8 years and an aggregate carrying capacity of about 5.159 million dwt. "This transaction is a natural evolution for Genco and Baltic Trading, and we are confident that it will deliver superior value to the shareholders of both companies," Chairman of Genco and Baltic Trading Peter C. Georgiopoulos said. "The combined company will be poised to capitalize on opportunities in the current market environment, and we believe the combined platform is well positioned for continued growth as a consolidator in our industry." About 1.5 million shares of Baltic Trading were traded by 10:56 a.m. Wednesday, above the average trading volume of about 676,000 shares a day. TheStreet Ratings team rates BALTIC TRADING LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation: "We rate BALTIC TRADING LTD (BALT) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Marine industry. The net income has significantly decreased by 1055.4% when compared to the same quarter one year ago, falling from $0.59 million to -$5.61 million. The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Marine industry and the overall market, BALTIC TRADING LTD's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has significantly decreased to $0.26 million or 95.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 76.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1100.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now. BALTIC TRADING LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BALTIC TRADING LTD continued to lose money by earning -$0.36 versus -$0.49 in the prior year. For the next year, the market is expecting a contraction of 11.1% in earnings (-$0.40 versus -$0.36). You can view the full analysis from the report here: BALT Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
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