NEW YORK (TheStreet) -- CorEnergy Infrastructure (CORR) shares are up 0.83% to $6.12 in morning trading on Wednesday after the energy infrastructure real estate trust announced the pricing of its two previously announced secondary offerings.
For its common stock offering, the company agreed to sell 11.25 million shares for $6 per share.
For its convertible notes offering, the company priced its unsecured senior notes at $100 million with an initial conversion price of $6.60.
Bother offerings are expected to close on or about June 29 with net proceeds from the sale to be used to partially finance its $245 million acquisition of a subsea pipeline system in the Gulf of Mexico from Energy XXI (EXXI).
Separately, the company was upgraded to "outperform" from "sector perform" by analysts today at RBC Capital who also raised its price target to $8 from $7.
TheStreet Ratings team rates CORENERGY INFRASTRUCTURE TR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CORENERGY INFRASTRUCTURE TR (CORR) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing 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 8.4%. Since the same quarter one year prior, revenues rose by 45.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- CORENERGY INFRASTRUCTURE TR reported flat earnings per share in the most recent quarter. 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, CORENERGY INFRASTRUCTURE TR increased its bottom line by earning $0.23 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus $0.23).
- CORR has underperformed the S&P 500 Index, declining 8.60% from its price level of one year ago. 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.
- Net operating cash flow has decreased to $6.16 million or 24.06% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: CORR Ratings Report