Penn Virginia Resource Partners LP Stock Downgraded (PVR)

NEW YORK ( TheStreet) -- Penn Virginia Resource Partners (NYSE: PVR) has been downgraded by TheStreet Ratings from buy to hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • PVR, with its decline in revenue, underperformed when compared the industry average of 15.7%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PENN VIRGINIA RES PRTNR LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PENN VIRGINIA RES PRTNR LP increased its bottom line by earning $1.40 versus $0.96 in the prior year. For the next year, the market is expecting a contraction of 21.4% in earnings ($1.10 versus $1.40).
  • The share price of PENN VIRGINIA RES PRTNR LP has not done very well: it is down 8.22% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PENN VIRGINIA RES PRTNR 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 $45.17 million or 17.59% 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.
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Penn Virginia Resource Partners, L.P. engages in the management of coal and natural resource properties; and gathering and processing of natural gas in the United States. It operates in two segments, Coal and Natural Resource Management, and Natural Gas Midstream. Penn Virginia Resource has a market cap of $2.02 billion and is part of the basic materials sector and metals & mining industry.

You can view the full Penn Virginia Resource Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
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