Editor's Note: 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
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 high debt management risk and premium valuation.
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Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 4.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Compared to its closing price of one year ago, TLLP's share price has jumped by 57.98%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The gross profit margin for TESORO LOGISTICS LP is rather high; currently it is at 60.40%. Regardless of TLLP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TLLP's net profit margin of 35.40% significantly outperformed against the industry.
- TESORO LOGISTICS LP reported flat earnings per share in the most recent quarter. 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, TESORO LOGISTICS LP turned its bottom line around by earning $1.12 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.12).
Tesoro Logistics LP engages in the ownership, operation, development, and acquisition of crude oil and refined products logistics assets in the United States. The company is involved in the gathering, terminalling, transportation, and storage of crude oil and refined products. The company has a P/E ratio of 25.9, above the S&P 500 P/E ratio of 17.7. Tesoro Logistics has a market cap of $888.2 million and is part of the basic materials sector and energy industry. Shares are up 33.7% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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