BreitBurn Energy Partners (BBEP) Showing Signs Of A Dead Cat Bounce Today

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 BreitBurn Energy Partners ( BBEP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified BreitBurn Energy Partners as such a stock due to the following factors:

  • BBEP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.7 million.
  • BBEP has traded 96,054 shares today.
  • BBEP is up 3.2% today.
  • BBEP was down 7.6% yesterday.

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More details on BBEP:

BreitBurn Energy Partners L.P., an independent oil and gas company, acquires, explores, and develops oil, natural gas liquids (NGLs), and gas properties in the United States. The stock currently has a dividend yield of 21.6%. Currently there are 8 analysts that rate BreitBurn Energy Partners a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for BreitBurn Energy Partners has been 2.3 million shares per day over the past 30 days. BreitBurn Energy has a market cap of $1.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.76 and a short float of 3.8% with 0.88 days to cover. Shares are down 56.8% year-to-date as of the close of trading on Thursday.

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 BreitBurn Energy Partners as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • BBEP's very impressive revenue growth greatly exceeded the industry average of 6.3%. Since the same quarter one year prior, revenues leaped by 153.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BREITBURN ENERGY PARTNERS LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BREITBURN ENERGY PARTNERS LP continued to lose money by earning -$0.40 versus -$0.60 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$0.40).
  • The debt-to-equity ratio is somewhat low, currently at 0.91, 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 BBEP'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.
  • BBEP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 53.25%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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, BREITBURN ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and 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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