NEW YORK (TheStreet) -- Shares of Western Gas Partners (WES) - Get Western Midstream Partners, LP Report were falling 5.2% to $69.30 Thursday after the company priced its public offering of 7.5 million common units.
The oil and gas pipeline company priced its 7.5 million common unit public offering at $70.85 a common unit. The underwriters of the public offering have a 30-day option to purchase up to 1.125 million additional common units.
Western Gas Partners said it plans to use net proceeds from the offering to fund part of the cash purchase price of its pending acquisition of Nuevo Midstream. If the acquisition isn't completed, the company will use the net proceeds for general partnership purposes which include repaying borrowings under its revolving credit facility.
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TheStreet Ratings team rates WESTERN GAS PARTNERS LP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate WESTERN GAS PARTNERS LP (WES) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 19.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WESTERN GAS PARTNERS LP has improved earnings per share by 13.2% 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 two years. We feel that this trend should continue. During the past fiscal year, WESTERN GAS PARTNERS LP increased its bottom line by earning $1.81 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.81).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 30.8% when compared to the same quarter one year prior, rising from $78.51 million to $102.68 million.
- 48.35% is the gross profit margin for WESTERN GAS PARTNERS LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.45% significantly outperformed against the industry average.
- Net operating cash flow has increased to $139.57 million or 12.50% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.54%.
- You can view the full analysis from the report here: WES Ratings Report