NEW YORK ( TheStreet) -- Nustar GP Holdings (NYSE: NSH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • NSH's revenue growth trails the industry average of 31.9%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for NUSTAR GP HOLDINGS LLC is currently very high, coming in at 100.00%. NSH has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, NSH's net profit margin of 96.70% significantly outperformed against the industry.
  • NSH has underperformed the S&P 500 Index, declining 7.71% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Net operating cash flow has decreased to $19.72 million or 30.91% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

NuStar GP Holdings, LLC owns general partner and limited partner interests in NuStar Energy L.P. that engages in the terminalling and storage of petroleum products, transportation of petroleum products and anhydrous ammonia, and marketing of asphalt and fuels. The company has a P/E ratio of 20.3, above the average energy industry P/E ratio of 19.9 and above the S&P 500 P/E ratio of 17.7. Nustar GP has a market cap of $1.3 billion and is part of the basic materials sector and energy industry. Shares are down 13% year to date as of the close of trading on Monday.

You can view the full Nustar GP Ratings Report or get investment ideas from our investment research center.
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