Rand Logistics, Inc. (NASDAQ:RLOG)

Is Rand Logistics, Inc. (NASDAQ:RLOG) Undervalued?

Rand Logistics, Inc. (NASDAQ:RLOG)

Rand Logistics, Inc. (NASDAQ:RLOG) shares have bounced off their 52-week lows of $0.32 and are trading around $0.40 on very heavy volumes. The 30-day, daily average trading volume is listed at just over 131,000 but by 1:40 PM EST over 1.7 million shares of RLOG have traded hands. There is no recent news from the company that might offer a reason for the increased volumes.

New Jersey, NJ-based Rand Logistics, Inc. (NASDAQ:RLOG) operates a fleet of bulk freight ships that services the great lakes region. The fleet consists of ten self-unloading bulk carriers, including eight River Class vessels and one River Class integrated tug/barge unit, and three conventional bulk carriers. Rand Logistics’ vessels are operated under the U.S. Jones Act – which dictates that only ships that are built, crewed, and owned by U.S. citizens can operate between U.S. ports. Rand also operates under the Canada Marine Act that mandates Canadian commissioned ships to operate between Canadian ports.

The logic of the continued slide of Rand Logistics, Inc. (NASDAQ:RLOG) could be questioned. Rand is one of the largest bulk shipping companies operating on the Great Lakes and the premiere provider in the River Class sector and have over a 50% market share of the Great Lakes bulk freight shipping services in the River Class sector. Overall, more than 95% of their contracts are long-term and with quality counter-parties such as Cargill, ADM, and Arcelor Mittal. In 2015 shareholders experienced per share losses of (-$0.59) but that loss shrank to (-$0.31) in 2016. Sales have remained fairly steady but in 2016 they did record the second lowest sales figures in the last five years.

Given that nothing appears catastrophic the performance of Rand Logistics, Inc. (NASDAQ:RLOG) seems extreme. RLOG shares have dropped over 72% for the year and are down over 58% YTD. Given the volume size in today’s move higher, shares may be seen as undervalued by some.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.