Targa Resources Partners (NGLS) Reaches New Lifetime High Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Targa Resources Partners ( NGLS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Targa Resources Partners as such a stock due to the following factors:

  • NGLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.6 million.
  • NGLS has traded 212,639 shares today.
  • NGLS is trading at a new lifetime high.

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More details on NGLS:

Targa Resources Partners LP provides midstream natural gas, natural gas liquid (NGL), terminaling, and crude oil gathering services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. The stock currently has a dividend yield of 5.7%. NGLS has a PE ratio of 131.7. Currently there are 8 analysts that rate Targa Resources Partners a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Targa Resources Partners has been 314,700 shares per day over the past 30 days. Targa has a market cap of $5.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.87 and a short float of 1.8% with 6.73 days to cover. Shares are up 33.9% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Targa Resources Partners as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 9.3%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • TARGA RESOURCES PARTNERS LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, TARGA RESOURCES PARTNERS LP reported lower earnings of $1.20 versus $1.98 in the prior year. For the next year, the market is expecting a contraction of 25.4% in earnings ($0.90 versus $1.20).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 43.9% when compared to the same quarter one year ago, falling from $46.90 million to $26.30 million.
  • The debt-to-equity ratio of 1.45 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NGLS maintains a poor quick ratio of 0.82, which illustrates the inability to avoid short-term cash problems.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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