NEW YORK (TheStreet) -- Shares of Green Plains (GPRE - Get Report) were gaining 15.9% to $29.64 Monday after the chemical company announced that its subsidiary Green Plains Partners confidentially submitted a draft registration statement for an initial public offering (IPO).
The S-1 form proposes an underwritten IPO of common units to raise about $200 million to $250 million in gross proceeds. Green Plains did not say how many common units of the partnership will be offering in the IPO, or when the IPO will take place.
The initial assets included in the partnership are expected to include Green Plains' downstream ethanol transportation and storage assets which are located in 12 states across the Midwest and Southwest U.S.
About 2.3 million shares of Green Plains were traded as of 10:55 a.m. following the announcement, above the company's average trading volume of about 1.3 million shares a day.
TheStreet Ratings team rates GREEN PLAINS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GREEN PLAINS INC (GPRE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues rose by 16.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 65.9% when compared to the same quarter one year prior, rising from $25.46 million to $42.24 million.
- Net operating cash flow has significantly increased by 70.80% to -$4.02 million when compared to the same quarter last year. In addition, GREEN PLAINS INC has also vastly surpassed the industry average cash flow growth rate of -11.94%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, GREEN PLAINS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: GPRE Ratings Report