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) -- Crestwood Midstream Partners (NYSE: CMLP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- The gross profit margin for CRESTWOOD MIDSTREAM PTNRS LP is rather high; currently it is at 54.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.17% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $30.61 million or 2.33% when compared to the same quarter last year. In addition, CRESTWOOD MIDSTREAM PTNRS LP has also modestly surpassed the industry average cash flow growth rate of -4.56%.
- CMLP, with its decline in revenue, slightly underperformed the industry average of 4.9%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- CMLP's debt-to-equity ratio of 0.84 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.87 is weak.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRESTWOOD MIDSTREAM PTNRS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff