Stock To Watch: Kinder Morgan Energy Partners (KMP) In Perilous Reversal

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 Kinder Morgan Energy Partners ( KMP) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Kinder Morgan Energy Partners as such a stock due to the following factors:

  • KMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $469.2 million.
  • KMP has traded 910,403 shares today.
  • KMP is down 3.2% today.
  • KMP was up 17.2% yesterday.

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More details on KMP:

Kinder Morgan Energy Partners, L.P. operates as a pipeline transportation and energy storage company in North America. The stock currently has a dividend yield of 7%. KMP has a PE ratio of 20.8. Currently there are 6 analysts that rate Kinder Morgan Energy Partners a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Kinder Morgan Energy Partners has been 1.1 million shares per day over the past 30 days. Kinder Morgan Energy has a market cap of $26.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.48 and a short float of 1.8% with 0.97 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Friday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kinder Morgan Energy Partners as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 18.6%. 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.
  • 39.03% is the gross profit margin for KINDER MORGAN ENERGY -LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.47% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $1,175.00 million or 20.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.19%.
  • KINDER MORGAN ENERGY -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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KINDER MORGAN ENERGY -LP increased its bottom line by earning $3.80 versus $1.64 in the prior year. For the next year, the market is expecting a contraction of 30.1% in earnings ($2.66 versus $3.80).
  • 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 on the basis of return on equity, KINDER MORGAN ENERGY -LP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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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