NEW YORK (TheStreet) -- Shares of Sunoco Logistics Partners were falling 5.6% to $40.72 on heavy trading volume after the oil and gas pipeline company announced the pricing of its public offering of 13.5 million common units. Sunoco Logistics priced the 13.5 million common units in its public offering at $41.76 a common unit. The company granted the underwriters of the public offering a 30-day option to buy up to 2.025 million additional shares. The company said it plans to use the net proceeds from the offering to repay outstanding borrowings under its $1.5 billion revolving credit facility, and for general partnership purposes. About 1.9 million shares of Sunoco Logistics were traded by 9:37 a.m. Wednesday, well above the company's average trading volume of about 677,000 shares a day. TheStreet Ratings team rates SUNOCO LOGISTICS PARTNERS LP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate SUNOCO LOGISTICS PARTNERS LP (SXL) a BUY. This is driven by multiple 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. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: The debt-to-equity ratio is somewhat low, currently at 0.64, 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 weak revenue results, SXL has outperformed against the industry average of 19.8%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. SUNOCO LOGISTICS PARTNERS LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SUNOCO LOGISTICS PARTNERS LP reported lower earnings of $0.56 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $0.56). The gross profit margin for SUNOCO LOGISTICS PARTNERS LP is currently extremely low, coming in at 6.66%. Regardless of SXL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.27% trails the industry average. In its most recent trading session, SXL has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels. You can view the full analysis from the report here: SXL Ratings Report
Click to view a price quote on SXL. Click to research the Energy industry.
from Latest TSC Headlines http://ift.tt/1Mt1gD4
No comments:
Post a Comment