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"We rate SEMGROUP CORP (SEMG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 48.7%. 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 its closing price of one year ago, SEMG's share price has jumped by 45.44%, exceeding the performance of the broader market during that same time frame. Although SEMG had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- SEMGROUP CORP 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 not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SEMGROUP CORP increased its bottom line by earning $1.13 versus $0.45 in the prior year.
- Net operating cash flow has declined marginally to $26.65 million or 5.26% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SEMGROUP CORP has marginally lower results.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 593.4% when compared to the same quarter one year ago, falling from $3.57 million to -$17.61 million.
- You can view the full analysis from the report here: SEMG Ratings Report