Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- AmeriGas Partners (NYSE: APU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- The revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 21.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 70.55% to $100.41 million when compared to the same quarter last year. In addition, AMERIGAS PARTNERS -LP has also vastly surpassed the industry average cash flow growth rate of 19.31%.
- 41.40% is the gross profit margin for AMERIGAS PARTNERS -LP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -15.60% is in-line with the industry average.
- Compared to where it was trading one year ago, APU is down 1.23% to its most recent closing price of 44.43. Looking ahead, our view is that this company's fundamentals give it good potential for further appreciation.
- Despite the current debt-to-equity ratio of 1.55, it is still below the industry average, suggesting that this level of debt is acceptable within the Gas Utilities industry. Despite the fact that APU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.61 is low and demonstrates weak liquidity.
-- Written by a member of TheStreet Ratings Staff