The company priced the public offering of the units at $10.53 a common unit. The underwriters of the offering have a 30-day option to buy an additional 2.25 million common units to cover any overallotments.
Capital Product partners will use part of the net proceeds to partially fund the purchase of two 5,000 dead weight product carriers. The company will also use the proceeds to repurchase about $60 million worth of common units from Capital Maritime & Trading, and for general corporate purposes.
TheStreet Ratings team rates CAPITAL PRODUCT PARTNERS LP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CAPITAL PRODUCT PARTNERS LP (CPLP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 13.6%. 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.
- CPLP's debt-to-equity ratio of 0.77 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CPLP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.91 is high and demonstrates strong liquidity.
- The gross profit margin for CAPITAL PRODUCT PARTNERS LP is rather high; currently it is at 58.94%. Regardless of CPLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPLP's net profit margin of 16.47% compares favorably to the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CAPITAL PRODUCT PARTNERS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- You can view the full analysis from the report here: CPLP Ratings Report
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