In an alert issued after the close analyst Jonathan Chappell said the decision stems from a “reallocation of resources”.
Despite the suspension Chappell applauded StealthGas for reporting a fourth-quarter gain that was in-line with Wall Street’s consensus estimate.
He argued that this was an important development because the Athens-based operator fell short in six of the last seven quarters.
Chappell praised StealthGas, which trades under the ticker “GASS”, for implementing a $20m buy-back programme but fears management and the board will need to do more to narrow the gap between its share price and net asset value (NAV).
“We believe the stock's significant discount to NAV is likely to remain until GASS can return to sustainable double-digit EPS growth and starts rebuilding a track record of meeting Street expectations,” he said.
The forecaster pointed out that management believes shares of StealthGas, which were commanding $6.05 a piece at the close, are trading at a 50% discount to net asset value.
While Chappell is confident StealthGas will gain traction upon delivery of more newbuildings he also expressed concerns about dilution.
“We believe the rapid share count increase over the last two years will mute the impact of this fleet expansion until all ships are delivered and generating revenue [in 2017],” he explained.
“Moreover, despite a still-manageable orderbook, relatively stagnant rates are placing the onus of earnings growth completely on new vessels.”
