3 Stocks Pushing The Utilities Sector Lower

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.

The Utilities sector as a whole closed the day down 1.0% versus the S&P 500, which was up 0.1%. Laggards within the Utilities sector included U S Geothermal ( HTM), down 3.1%, Gas Natural ( EGAS), down 3.6%, American Midstream Partners ( AMID), down 1.7%, GreenHunter Resources ( GRH), down 13.5% and Ormat Technologies ( ORA), down 1.7%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the sector lower today:

American Midstream Partners ( AMID) is one of the companies that pushed the Utilities sector lower today. American Midstream Partners was down $0.52 (1.7%) to $30.08 on light volume. Throughout the day, 26,855 shares of American Midstream Partners exchanged hands as compared to its average daily volume of 41,600 shares. The stock ranged in price between $30.00-$31.14 after having opened the day at $30.60 as compared to the previous trading day's close of $30.60.

American Midstream Partners, LP is engaged in gathering, treating, processing, and transporting natural gas primarily in the Gulf Coast and Southeast regions of the United States. American Midstream Partners has a market cap of $344.7 million and is part of the utilities industry. Shares are up 13.0% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate American Midstream Partners a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates American Midstream Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on AMID go as follows:

  • The revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 27.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 43.97% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AMERICAN MIDSTREAM PRTNRS LP has improved earnings per share by 20.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN MIDSTREAM PRTNRS LP reported poor results of -$6.84 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings (-$0.53 versus -$6.84).
  • The gross profit margin for AMERICAN MIDSTREAM PRTNRS LP is currently extremely low, coming in at 13.34%. Regardless of AMID'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 0.52% trails the industry average.
  • 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. 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.

You can view the full analysis from the report here: American Midstream Partners Ratings Report

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At the close, Gas Natural ( EGAS) was down $0.47 (3.6%) to $12.70 on heavy volume. Throughout the day, 176,104 shares of Gas Natural exchanged hands as compared to its average daily volume of 88,700 shares. The stock ranged in price between $12.61-$13.15 after having opened the day at $13.00 as compared to the previous trading day's close of $13.17.

Gas Natural Inc. is engaged in the distribution and sale of natural gas to residential, commercial, and industrial customers. It operates through Natural Gas Operations, Marketing and Production Operations, and Pipeline Operations segments. Gas Natural has a market cap of $134.2 million and is part of the utilities industry. Shares are up 64.0% year-to-date as of the close of trading on Tuesday. Currently there are 2 analysts who rate Gas Natural a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Gas Natural as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on EGAS go as follows:

  • The revenue growth came in higher than the industry average of 35.9%. Since the same quarter one year prior, revenues rose by 49.1%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that EGAS's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Gas Utilities industry and the overall market, GAS NATURAL INC's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Gas Natural Ratings Report

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

U S Geothermal ( HTM) was another company that pushed the Utilities sector lower today. U S Geothermal was down $0.02 (3.1%) to $0.67 on light volume. Throughout the day, 300,697 shares of U S Geothermal exchanged hands as compared to its average daily volume of 544,900 shares. The stock ranged in price between $0.67-$0.70 after having opened the day at $0.68 as compared to the previous trading day's close of $0.69.

U S Geothermal has a market cap of $72.3 million and is part of the utilities industry. Shares are up 82.9% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate U S Geothermal a buy, no analysts rate it a sell, and 2 rate it a hold.

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

Highlights from TheStreet Ratings analysis on HTM go as follows:

You can view the full analysis from the report here: U S Geothermal Ratings Report

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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