TOP SHIPS Inc (NASDAQ:TOPS) May Just Be On The Road To Recovery

Very few small cap companies have experienced the level of ups and downs TOP SHIPS Inc (NASDAQ:TOPS) has been through within the last year.Since November 2016, analysts have been kept guessing by its movement and despite rumors that it would recover, the stock is yet to return to its previous highs.In the last few weeks, the price has doubled from a low $0.38 to nearly $0.8 a share.Here, you will find the details behind the company and information what you can expect further down the line.The stock’s price movement is shown in the graph below: TOPS Daily ChartIn the last three months, the company has had 3 reverse splits within the last 3 months in order to keep trading above the NASDAQ’s minimum bid requirement. It has also announced an equity purchase which was not very well received by the market.Brief HistoryFor our readers who may not be familiar with Top Ships Inc, here is a brief background on the companyTop Ships, Inc. is an international ship-owning company which was established by Evangelos J. Pistiolis on January 10, 2000 and is headquartered in Maroussi, Greece. It was previously known as Top Tankers Inc before changing its name to TOP Ships in 2007.The company owns and operates tanker vessels focusing on the transportation of petroleum products such as clean, dirty, and bulk liquid chemicals, crude oil and other petroleum products. It also provides seaborne transportation services worldwide.In December 2016, TOP Ships had a fleet of two chartered-in 49,737 deadweight ton (dwt) product/chemical tankers vessels, the M/T Stenaweco Energy and the M/T Stenaweco Evolution; two 39,208 dwt product/chemical tankers vessels, the M/T Eco Fleet and the M/T Eco Revolution; and two 49,737 dwt product/chemical tankers, the M/T Stenaweco Excellence and M/T Nord Valiant.The firms has built a reputation in the global ocean transport industry for operating and maintaining vessels with high standards of performance, reliability and safety.Its strategy is to grow the company’s fleet via acquisitions of newbuilding, resale or secondhand vessels of superior ECO designRecent DevelopmentsIn August 2017 TOP Ship’s share value rose by 7.0% to $1.40 in premarket trade, after it announced that it regained compliance with the Nasdaq's minimum bid price requirement. That compliance came after the company effected at 30-for-1 reverse stock split on earlier that month that amplified its stock price by a factor of 30.The company had earlier received a notice from the Nasdaq that the stock had traded below the minimum bid price requirement of $1.00 a share for 30 consecutive days. The reverse stock split was the third reverse split effected in three months, including a 15-for-1 split in and a 20-for-1 split earlier in May 11 meaning the stock price was increased by a factor of 9,000 in three months to regain compliance.Top Ships Inc. announced in September that upon its delivery from Hyundai in the third quarter of 2018, M/T Eco Palm Desert will enter into time charter employment with Central Ship Chartering Inc, a related party, for a firm duration of three years. The charterer has the option to extend the firm employment period by two additional years. The firm could potentially earn a total gross revenue backlog from this time charter of up to $27.5 million including the optional periods.It also informed shareholders that it has entered into a $23.5m bank loan facility with a European bank for the financing of Eco Palm Desert.Following the agreement of the loan, the remaining contractual commitments for the acquisition of the Company’s fleet, net of expected debt drawdowns, are reduced to $32.1 million, pursuant to newbuilding agreements for M/T Eco Holmby Hills, M/T Eco Palm Springs and M/T Eco Palm Desert.Evangelos Pistiolis, President and CEO of the Company, stated:

“The total gross revenue backlog for the fixed charter period of all of the Company’s operating fleet stands at about $106 million and when adding the 50% of our joint venture vessels it increases to about $122 million, with cashflow visibility reaching into 2021. Our business strategy continues to be focused on further expanding our fleet as it is important that we achieve a certain critical mass in terms of fleet size with an aim to maximize our operational efficiencies and synergies.”Source

FinancialsAlthough not always reflected in the share value, Top Ships has continued to increase its revenue year on year, jumping from $3.6 million in 2014 and $13.1 million in 2015 to $28.44 million in 2016. Profits have also risen with revenues, and the company declared profits of $1.5 million, up from a loss of $8.5 million in 2015.The firm however is heavily leveraged with long term liabilities of over $96.0 million on its balance sheet which is more than double the liabilities form the previous year. It has very low liquidity with a very low current ratio 0.23ConclusionJudging from its financial results, the company has a lot of potential although the sanctions and lawsuits against Kalani Investments have halted it growth. It is expected that once this sorted out, it will be on the rise once more.We will be updating our subscribers as soon as we know more. For the latest updates on TOPS, sign up below!Disclosure: We have no position in TOPS and have not been compensated for this article.