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NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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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 40.88%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TGS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 119.90% to $53.06 million when compared to the same quarter last year. In addition, TRANSPORTADORA DE GAS SUR has also vastly surpassed the industry average cash flow growth rate of 11.42%.
- TRANSPORTADORA DE GAS SUR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TRANSPORTADORA DE GAS SUR reported lower earnings of $0.10 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus $0.10).
- The revenue fell significantly faster than the industry average of 35.9%. Since the same quarter one year prior, revenues fell by 26.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, TGS's quick ratio is somewhat strong at 1.30, demonstrating the ability to handle short-term liquidity needs.
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 $405.2 million and is part of the utilities sector and utilities industry. Shares are up 18.9% year to date as of the close of trading on Tuesday.
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