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 generally disappointing historical performance in the stock itself and generally weak debt management.
Highlights from the ratings report include:
- PNG'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 30.00%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, PNG is still more expensive than most of the other companies in its industry.
- Despite currently having a low debt-to-equity ratio of 0.33, 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 PNG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.56 is low and demonstrates weak liquidity.
- Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PAA NATURAL GAS STORAGE LP's return on equity significantly trails that of both the industry average and the S&P 500.
- 48.40% is the gross profit margin for PAA NATURAL GAS STORAGE LP which we consider to be strong. Regardless of PNG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PNG's net profit margin of 29.20% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 56.30% to $22.50 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 35.80%.
PAA Natural Gas Storage, L.P., through its subsidiaries, engages in the acquisition, development, operation, and commercial management of natural gas storage facilities. As of May 4, 2011, it owned and operated three natural gas storage facilities in Louisiana, Mississippi, and Michigan. The company has a P/E ratio of 23.3, below the average utilities industry P/E ratio of 23.6 and above the S&P 500 P/E ratio of 17.7. PAA Natural Gas has a market cap of $1 billion and is part of the
industry. Shares are down 28.3% year to date as of the close of trading on Tuesday.
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