Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
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 solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, TGS's share price has jumped by 76.21%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has slightly increased to $61.94 million or 9.98% when compared to the same quarter last year. Despite an increase in cash flow, TRANSPORTADORA DE GAS SUR's average is still marginally south of the industry average growth rate of 14.83%.
- The revenue fell significantly faster than the industry average of 35.9%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for TRANSPORTADORA DE GAS SUR is currently lower than what is desirable, coming in at 27.96%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.26% is significantly below that of the industry average.
- 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 Gas Utilities industry. The net income has significantly decreased by 143.9% when compared to the same quarter one year ago, falling from $22.29 million to -$9.79 million.
Transportadora de Gas del Sur S.A. operates as a gas transportation company in Latin America. Transportadora de Gas del Sur has a market cap of $518 million and is part of the utilities sector and utilities industry. Shares are up 43.3% year to date as of the close of trading on Wednesday.
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