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NEW YORK (TheStreet) -- Rentech Nitrogen Partners (RNF) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RENTECH NITROGEN PARTNERS LP (RNF) 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 increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 86.0% when compared to the same quarter one year prior, rising from -$22.26 million to -$3.11 million.
- Net operating cash flow has significantly increased by 76.77% to $50.60 million when compared to the same quarter last year. In addition, RENTECH NITROGEN PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of 11.15%.
- RENTECH NITROGEN PARTNERS LP reported significant earnings per share improvement 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, RENTECH NITROGEN PARTNERS LP reported lower earnings of $0.10 versus $2.78 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.10).
- 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 Chemicals industry and the overall market, RENTECH NITROGEN PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for RENTECH NITROGEN PARTNERS LP is rather low; currently it is at 17.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.68% is significantly below that of the industry average.
- You can view the full analysis from the report here: RNF Ratings Report