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Crestwood Midstream Partners LP Stock Upgraded (CMLP)

NEW YORK (TheStreet) -- Crestwood Midstream Partners (NYSE:CMLP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, increase in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • CMLP's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 65.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $22.15 million or 27.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.47%.
  • The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 4.6% when compared to the same quarter one year prior, going from $9.38 million to $9.81 million.
  • The gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP is rather high; currently it is at 52.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CMLP's net profit margin of 18.20% compares favorably to the industry average.
  • After a year of stock price fluctuations, the net result is that CMLP's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

Crestwood Midstream Partners LP primarily engages in the gathering, processing, treating, compressing, transporting, and selling natural gas in the United States. The company has a P/E ratio of 32.4, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Crestwood Midstream has a market cap of $1.04 billion and is part of the basic materials sector and energy industry. Shares are down 10.1% year to date as of the close of trading on Wednesday.

You can view the full Crestwood Midstream Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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