Barclays rating is due to the fact it likes the strategic and transformational changes the natural gas company has been making over the past 12 months.
Completed acquisitions and drops have successfully diversified American Midstream Partners into liquids storage and established its gathering footprint in the Eagle Ford shale, Barclays said.
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TheStreet Ratings team rates AMERICAN MIDSTREAM PRTNRS LP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICAN MIDSTREAM PRTNRS LP (AMID) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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, AMERICAN MIDSTREAM PRTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AMERICAN MIDSTREAM PRTNRS LP is currently extremely low, coming in at 13.75%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AMID's net profit margin of -7.64% significantly underperformed when compared to the industry average.
- AMID's debt-to-equity ratio of 0.79 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.19 is very low and demonstrates very weak liquidity.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 0.7% when compared to the same quarter one year ago, dropping from -$6.25 million to -$6.29 million.
- AMERICAN MIDSTREAM PRTNRS LP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AMERICAN MIDSTREAM PRTNRS LP reported poor results of -$5.91 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$5.91).
- You can view the full analysis from the report here: AMID Ratings Report