Seanergy Maritime Holdings Corp (NASDAQ:SHIP) Trying To Right The Ship

Seanergy Maritime Holdings Corp (NASDAQ:SHIP) received a letter from NASDAQ wherein the exchange noted that the company is not in compliance with Nasdaq Listing Rule. The bid price of the company shares had remained below $1 for 30 consecutive business days.How did the company and the market price react to the news?The company answered with the following:

"The Company intends to monitor the closing bid price of its common stock between now and November 14, 2017 and is considering its options, including a reverse stock split, in order to regain compliance with the Nasdaq Capital Market minimum bid price requirement. In the event the Company does not regain compliance within the 180-day grace period and it meets all other listing standards and requirements, the Company may be eligible for an additional 180-day grace period." Source

What does it mean? Trading on the NASDAQ is quite important for the company, as it will be able to receive more financing than on the OTC Markets. Hence, SHIP will try every option available to make the share price increase. A reverse stock split may be an option, but there may be many others. We believe that some of them may benefit the market participants.The letter was received on May 26, 2017. It seems that the market remained neutral. It was known that the bid price was not in compliance with the rule, and SHIP did not disclose what are their plans. We may need to wait for these plans to see a real market reaction. Have a look at the chart price:SourceBusinessSHIP is a shipping company providing dry bulk transportation services. The company's fleet consists of eleven dry bulk carriers, a combined cargo-carrying capacity of approximately 1,682,582 dwt, and an average fleet age of about 8.1 years. In its annual report, the company is said to have obtained reputation in its sector for "operating and maintaining vessels with high standards of performance, reliability and safety". Additionally, the company's management consists of executives with "experience operating large and diversified fleets, and who have strong ties to a number of international charterers". Furthermore, we checked the customers of the company and saw big names there: Trafigura, Rio Tinto, and BHP Billiton.The recent history of the company shows that it is now quite a clean new business after its restructuring in 2012; the sale of vessels, and the payment of the debt. In addition, it seems that it has acquired new assets, and is growing again. This is from the annual report:

"In August 2012, we began discussions with our former lenders, and in connection with our restructuring we sold all 20 of our former vessels. In March 2014, we completed our restructuring, following which we did not own any vessels and did not have any long term debt obligations. During 2015 we acquired eight drybulk vessels, comprising six Capesize and two Supramax, and acquired an additional two Capesize vessels between November and December 2016." Source

We will see later that the company's financial situation is at the moment quite sound, and the current share price does not represent the true value of SHIP. But, first have a look at the recent developments.Recent newsOn Jun 1, 2017, the company issued a press release noting the delivery of a new vessel, the M/V Partnership, a 179,213 dwt Capesize dry bulk vessel, built in 2012 by Hyundai in South Korea. The agreement had been signed in April 2017. The news is quite good, as it marks that the company keeps growing at a large pace. Stamatis Tsantanis, Synergy's CEO, said the following about the deal:

"We are pleased to take delivery of another modern Capesize vessel. We remain committed to expanding our quality fleet in the Capesize segment, which we strongly believe represents the best fundamentals in the dry bulk industry. We will continue to actively pursue accretive acquisition opportunities of quality Capesize vessels with an aim of increasing value for our shareholders." Source

Additionally, we could find the current fleet of the company in the press release:

Vessel NameVessel ClassCapacity (dwt)Year BuiltYardPartnershipCapesize179,2132012HyundaiChampionshipCapesize179,2382011Sungdong SBKnightshipCapesize178,9782010HyundaiLordshipCapesize178,8382010HyundaiGloriushipCapesize171,3142004HyundaiGeniushipCapesize170,0572010Sungdong SBPremiershipCapesize170,0242010Sungdong SBSquireshipCapesize170,0182010Sungdong SBLeadershipCapesize171,1992001Koyo ImabariGuardianshipSupramax56,8842011CSC Jinling ShipyardGladiatorshipSupramax56,8192010CSC Jinling ShipyardTotal / Average1,682,5828.1 yearsSource

The NASDAQ letter was announced on May 26, 2017. In addition to what we said before, the company released that the stock will continue trading on the NASDAQ exchange for the moment. Hence, the letter was mainly a warning. Regarding the different options available, the reverse split seems like a good idea. However, the company did one of them last year. Have a look:

"On January 7, 2016, we effected a one-for-five reverse split of our common stock. The reverse stock split became effective and the common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the opening of trading on January 8, 2016. This reduced the number of outstanding shares of our common stock from 97,612,971 shares on January 7, 2016, to 19,522,413 shares on January 8, 2016,after adjusting for fractional shares." Source

Financial situationThere is not a lot to explain when the financial situation is sound. As of June 12, 2017, the share price is $0.68. With that in mind, check the following financial figures, marking that the company is cash rich and the share price is below the book value per share:

Total Cash (mrq)12.86MTotal Cash Per Share (mrq)0.38Total Debt (mrq)210.1MTotal Debt/Equity (mrq)681.42Current Ratio (mrq)1.05Book Value Per Share (mrq)0.90

Source

ConclusionThere are several things that we appreciate in this company. Firstly, the way the company reacted to the NASDAQ letter. Some other companies do not respond until it is late, and short sellers profit. SHIP rapidly said that something would be done. Additionally, the company is acquiring assets and it seems to be growing at high pace after a period of restructuring. Finally, the balance sheet is quite clean, and the book value per share is 1.32x times the share price. Additionally, SHIP is cash rich; the cash per share is 0.55x the share price. Hence, the share price is undervalued. To sum up, have a look at this name, and subscribe to our subscription list to get the next company moves.We will be updating our subscribers as soon as we know more. For the latest updates on SHIP, sign up below!Disclosure: We have no position in SHIP and have not been compensated for this article.