Zacks Investment Research downgraded Colorado-based
MarkWest Energy Partners LP
) to Zacks Rank #5 (Strong Sell) on Mar 5.
Why the Downgrade?
MarkWest Energy witnessed sharp downward estimate revisions after
reporting disappointing fourth-quarter 2012 results. In fact,
this natural gas processor and distributor delivered negative
earnings surprises in 3 of the last 4 quarters with an average
miss of 9.72%.
On Feb 27, 2013, MarkWest Energy reported weak fourth quarter
2012 results, reflecting lower commodity prices.
The partnership's profit per unit - excluding mark-to-market
derivative activity and compensation expense - came in at 22
cents against the Zacks Consensus Estimate of 36 cents.
MarkWest's adjusted earnings per unit also deteriorated from the
year-earlier adjusted figure of 47 cents per unit.
With regard to business units, the Southwest segment's operating
income decreased 34.6% from the year-ago level to $73.2 million.
The Northeast segment's operating profit of $31.6 million also
fell 21.8% from last year's income of $40.4 million, affected by
lower fractionated volumes.
For 2013, estimates were revised downward over the last 7 days,
lowering the Zacks Consensus Estimate by 2.76% to $1.76 per unit.
Additionally, due to the volatile nature of the natural gas
processing business, we do not see any significant price upside
for MarkWest units in the next few quarters. We expect the
partnership to grow at a somewhat more conservative and
Other Stocks to Consider
Not all energy stocks are performing as poorly as MarkWest
Energy. The stocks of
Range Resources Corp.
NGL Energy Partners LP
) are worth considering. All these firms - sporting a Zacks Rank
#1(Strong Buy) - offer value and are worth accumulating at
ENERPLUS CORP (ERF): Free Stock Analysis
MARKWEST EGY PT (MWE): Free Stock Analysis
NGL ENERGY PART (NGL): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
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