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Eagle Rock Energy Partners LP Stock Upgraded (EROC)

NEW YORK (TheStreet) -- Eagle Rock Energy Partners (Nasdaq:EROC) 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, increase in net income, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 43.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 6.3% when compared to the same quarter one year prior, going from -$53.72 million to -$50.33 million.
  • Net operating cash flow has significantly increased by 89.73% to $38.99 million when compared to the same quarter last year. In addition, EAGLE ROCK ENERGY PARTNRS LP has also vastly surpassed the industry average cash flow growth rate of -52.08%.
  • EAGLE ROCK ENERGY PARTNRS LP has improved earnings per share by 38.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EAGLE ROCK ENERGY PARTNRS LP turned its bottom line around by earning $0.38 versus -$0.22 in the prior year. For the next year, the market is expecting a contraction of 36.8% in earnings ($0.24 versus $0.38).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EAGLE ROCK ENERGY PARTNRS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Eagle Rock Energy Partners, L.P., together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, marketing, and trading natural gas, as well as fractionating and transporting natural gas liquids (NGL). The company has a P/E ratio of 10.1, below the average energy industry P/E ratio of 14.7 and below the S&P 500 P/E ratio of 17.7. Eagle Rock Energy has a market cap of $1.22 billion and is part of the basic materials sector and energy industry. Shares are down 18.5% year to date as of the close of trading on Tuesday.

You can view the full Eagle Rock Energy 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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