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NEW YORK (TheStreet) -- Markwest Energy Partners (MWE) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARKWEST ENERGY PARTNERS LP (MWE) 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, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 44.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 47.63% is the gross profit margin for MARKWEST ENERGY PARTNERS LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 12.75% is above that of the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.74, 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 MWE's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
- 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, MARKWEST ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $139.26 million or 9.01% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MARKWEST ENERGY PARTNERS LP has marginally lower results.
- You can view the full analysis from the report here: MWE Ratings Report
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