NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to $1.42 million or 82.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- CEP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.45%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- 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, CONSTELLATION ENERGY PRTNRS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that CEP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.87 is high and demonstrates strong liquidity.
- CONSTELLATION ENERGY PRTNRS reported significant earnings per share improvement 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. During the past fiscal year, CONSTELLATION ENERGY PRTNRS turned its bottom line around by earning $0.81 versus -$11.31 in the prior year.
Constellation Energy Partners LLC engages in the acquisition, development, and production of oil and natural gas properties in the United States. The company has a P/E ratio of 1.4, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Constellation Energy has a market cap of $42.7 million and is part of the
industry. Shares are down 9.2% year to date as of the close of trading on Tuesday.
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-- 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.