NEW YORK ( TheStreet) -- Blueknight Energy Partners G.P. L.L.C (Nasdaq: BKEP) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally poor debt management. Highlights from the ratings report include:
- BLUEKNIGHT ENERGY PRTNRS LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BLUEKNIGHT ENERGY PRTNRS LP continued to lose money by earning -$0.54 versus -$0.91 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus -$0.54).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 355.4% when compared to the same quarter one year prior, rising from $2.63 million to $11.99 million.
- Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BLUEKNIGHT ENERGY PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- BKEP has underperformed the S&P 500 Index, declining 14.24% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The debt-to-equity ratio is very high at 3.40 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BKEP maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
-- Written by a member of TheStreet Ratings Staff