Sprague Resources Receives a Buy from FBR Capital

By Carrie Williams

FBR Capital analyst Robert Balsamo reiterated a Buy rating on Sprague Resources (NYSE: SRLP) on November 11 and set a price target of $35. The company’s shares opened today at $23.85.

Balsamo wrote:

“Post earnings, we are refreshing our model to reflect performance during the quarter and flow-through from operational results. Our estimates are not changing materially. SRLP continued to demonstrate an ability to generate stable cash flow and grow with limited dependence on the capital markets. Leverage remains low, and management reiterated its conviction for distribution growth of 1.5 cents per quarter through 2018.”

According to TipRanks.com, Balsamo is ranked 0 out of 5 stars with an average return of -9.7% and a 40.9% success rate. Balsamo covers the Basic Materials sector, focusing on stocks such as Calumet Specialty Products, Dcp Midstream Partners Lp, and EnLink Midstream Partners.

Sprague Resources has an analyst consensus of Moderate Buy.

Based on Sprague Resources’ latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $423 million and GAAP net loss of $9.28 million. In comparison, last year the company earned revenue of $558 million and had a net profit of $8.48 million.

Based on the recent corporate insider activity of 47 insiders, corporate insider sentiment is negative on the stock. Most recently, in March 2015, Brian Weego, the VP, Natural Gas of SRLP sold 2,500 shares for a total of $63,750.

Sprague Resources LP engages in the purchasing, storing, distributing and selling of refined petroleum products and natural gas. The company also provides energy and materials handling services. Its products include home heating oil, diesel fuels, residual fuels, gasoline and natural gas. The company operates its business through the following segments: Refined Products, Natural Gas, Materials Handling and Other Operations. The Refined Products segment offers refined products, such as heating oil, diesel, residual fuel oil, kerosene, jet fuel and gasoline. This segment serves federal and state agencies, municipalities, regional transit authorities, large industrial companies, hospitals and educational institutions. The Natural Gas segment sells and distributes natural gas. The Materials Handling segment stores various customer owned products, including asphalt, clay slurry, salt, gypsum, coal, petroleum coke, caustic soda, tallow, pulp and heavy equipment. Sprague Resources was founded on June 23, 2011 and is headquartered in Portsmouth, NH.