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Inergy, L.P. Message Board

  • wareham2620 wareham2620 Dec 18, 2008 2:43 PM Flag

    The street 12/14/08

    We rate INERGY LP (NRGY) 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, good cash flow from operations and notable
    return on equity. However, as a counter to these strengths, we also find weaknesses including a generally
    disappointing performance in the stock itself, deteriorating net income and generally poor debt management.
    Despite its growing revenue, the company underperformed as compared with the industry average of 30.1%.
    Since the same quarter one year prior, revenues rose by 24.6%. This growth in revenue does not appear to
    have trickled down to the company's bottom line, displaying stagnant earnings per share.
    Net operating cash flow has increased to $32.80 million or 33.87% when compared to the same quarter last
    year. The firm also exceeded the industry average cash flow growth rate of 22.89%.
    INERGY LP reported flat earnings per share in the most recent quarter. Stable earnings per share over the
    past year indicate the company has sound management over its earnings and share float. However, the
    consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal
    year, INERGY LP reported lower earnings of $0.71 versus $0.72 in the prior year. This year, the market expects
    an improvement in earnings ($1.09 versus $0.71).
    The company, on the basis of change in net income from the same quarter one year ago, has significantly
    underperformed compared to the Oil, Gas & Consumable Fuels industry average, but is greater than that of
    the S&P 500. The net income has decreased by 17.0% when compared to the same quarter one year ago,
    dropping from -$28.30 million to -$33.10 million.
    Currently the debt-to-equity ratio of 1.74 is quite high overall and when compared to the industry average,
    suggesting that the current management of debt levels should be re-evaluated. Along with this, the company
    manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash