New Lifetime High Reached By Targa Resources (TRGP)

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

  • TRGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
  • TRGP has traded 1,925 shares today.
  • TRGP is trading at a new lifetime high.

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More details on TRGP:

Targa Resources Corp., through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) 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 2.4%. TRGP has a PE ratio of 64.8. Currently there are 5 analysts that rate Targa Resources a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Targa Resources has been 275,300 shares per day over the past 30 days. Targa has a market cap of $4.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.08 and a short float of 3.8% with 4.32 days to cover. Shares are up 24.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Targa Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • TRGP's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 68.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TARGA RESOURCES CORP has improved earnings per share by 46.9% 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 two years. We feel that this trend should continue. During the past fiscal year, TARGA RESOURCES CORP increased its bottom line by earning $1.55 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $1.55).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 46.3% when compared to the same quarter one year prior, rising from $13.40 million to $19.60 million.
  • Powered by its strong earnings growth of 46.87% and other important driving factors, this stock has surged by 65.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The gross profit margin for TARGA RESOURCES CORP is currently extremely low, coming in at 10.09%. Regardless of TRGP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.83% trails the industry average.

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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