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Penn Virginia Resource Partners LP Stock Upgraded (PVR)

NEW YORK (TheStreet) -- Penn Virginia Resource Partners (NYSE:PVR) has been upgraded by TheStreet Ratings from hold to buy. The company's strongest point has been its expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue fell significantly faster than the industry average of 12.4%. Since the same quarter one year prior, revenues fell by 27.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PENN VIRGINIA RES PRTNR LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PENN VIRGINIA RES PRTNR LP increased its bottom line by earning $1.40 versus $0.97 in the prior year. For the next year, the market is expecting a contraction of 31.4% in earnings ($0.96 versus $1.40).
  • The gross profit margin for PENN VIRGINIA RES PRTNR LP is currently lower than what is desirable, coming in at 30.50%. Regardless of PVR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.50% trails the industry average.
  • The share price of PENN VIRGINIA RES PRTNR LP has not done very well: it is down 11.30% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • Net operating cash flow has decreased to $23.48 million or 37.47% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Penn Virginia Resource Partners, L.P. engages in the management of coal and natural resource properties; and gathering and processing of natural gas in the United States. It operates in two segments, Coal and Natural Resource Management, and Natural Gas Midstream. Penn Virginia Resource has a market cap of $1.99 billion and is part of the basic materials sector and metals & mining industry. Shares are down 5.3% year to date as of the close of trading on Thursday.

You can view the full Penn Virginia Resource 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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