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NEW YORK (TheStreet) -- Southcross Energy Partners (SXE) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHCROSS ENERGY PRTNRS LP (SXE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow and feeble growth in its earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 508.6% when compared to the same quarter one year ago, falling from -$4.07 million to -$24.78 million.
- The gross profit margin for SOUTHCROSS ENERGY PRTNRS LP is currently extremely low, coming in at 4.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.71% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$2.40 million or 163.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SOUTHCROSS ENERGY PRTNRS LP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, SOUTHCROSS ENERGY PRTNRS LP continued to lose money by earning -$0.72 versus -$1.17 in the prior year. For the next year, the market is expecting a contraction of 18.1% in earnings (-$0.85 versus -$0.72).
- This stock's share value has moved by only 18.12% over the past year. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: SXE Ratings Report
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