NEW YORK ( TheStreet) -- Teekay Offshore Partners (NYSE: TOO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- The share price of TEEKAY OFFSHORE PARTNERS LP has not done very well: it is down 8.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 265.5% when compared to the same quarter one year ago, falling from -$20.54 million to -$75.08 million.
- The debt-to-equity ratio is very high at 5.04 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY OFFSHORE PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $50.50 million or 43.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.