Rating Change #9
Vanguard Natural Resources LLC
has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Net operating cash flow has increased to $61.60 million or 39.20% when compared to the same quarter last year. In addition, VANGUARD NATURAL RESOURCES has also vastly surpassed the industry average cash flow growth rate of -15.37%.
- VNR, with its very weak revenue results, has greatly underperformed against the industry average of 7.1%. Since the same quarter one year prior, revenues plummeted by 85.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 190.6% when compared to the same quarter one year ago, falling from $75.88 million to -$68.73 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, VANGUARD NATURAL RESOURCES's return on equity significantly trails that of both the industry average and the S&P 500.
Vanguard Natural Resources, LLC, through its subsidiaries, engages in the acquisition and development of oil and natural gas properties in the United States. The company has a P/E ratio of 1422, above the S&P 500 P/E ratio of 17.7. Vanguard Natural has a market cap of $1.67 billion and is part of the basic materials sector and energy industry. Shares are up 2.9% year to date as of the close of trading on Tuesday.
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