NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally poor debt management and weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Gas Utilities industry average. The net income increased by 26.0% when compared to the same quarter one year prior, rising from -$12.37 million to -$9.15 million.
- APU's revenue growth trails the industry average of 44.6%. Since the same quarter one year prior, revenues rose by 18.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AMERIGAS PARTNERS -LP has improved earnings per share by 17.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERIGAS PARTNERS -LP reported lower earnings of $1.78 versus $2.33 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $1.78).
- In its most recent trading session, APU has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, APU has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
AmeriGas Partners, L.P., through its subsidiary, AmeriGas Propane, L.P., operates as a retail and wholesale distributor of propane gas in the United States. The company has a P/E ratio of 16.2, below the average utilities industry P/E ratio of 20.2 and below the S&P 500 P/E ratio of 17.7. AmeriGas has a market cap of $2.4 billion and is part of the
industry. Shares are down 12.7% year to date as of the close of trading on Monday.
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