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NEW YORK (TheStreet) -- Legacy Reserves (LGCY) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D.  TheStreet Ratings Team has this to say about their recommendation:

TheStreet Ratings team rates LEGACY RESERVES LP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate LEGACY RESERVES LP (LGCY) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• 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 606.8% when compared to the same quarter one year ago, falling from -$46.90 million to -$331.50 million.
• The debt-to-equity ratio of 1.47 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, LGCY has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
• 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, LEGACY RESERVES LP's return on equity significantly trails that of both the industry average and the S&P 500.
• Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 55.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 502.43% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
• LEGACY RESERVES LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LEGACY RESERVES LP reported poor results of -$4.24 versus -$0.62 in the prior year. This year, the market expects an improvement in earnings (-$0.44 versus -$4.24).
• You can view the full analysis from the report here: LGCY Ratings Report