Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural gas producer Crosstex Energy, L.P.
With that in mind, let's take a closer look at Crosstex's business and see what CAPS investors are saying about the stock right now.
Crosstex facts
|
Headquarters (Founded) |
Dallas (1992) |
|
Market Cap |
$495.0 million |
|
Industry |
Oil and gas refining and marketing |
|
Trailing-12-Month Revenue |
$3.3 billion |
|
Management |
Chairman/CEO Barry Davis |
|
Trailing-12-Month Return on Equity |
(11.7%) |
|
Cash / Debt |
$0.9 million / $1.1 billion |
|
6-Month Return |
280% |
|
Highly Rated Natural Gas Alternatives |
Chesapeake Energy |
|
CAPS Members Bearish on XTEX Also Bearish on |
UAL |
|
CAPS Members Bullish on XTEX Also Bullish on |
General Electric |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 12% of the 118 All-Star members who have rated Crosstex believe the stock will underperform the S&P 500 going forward. These bears include UltraLong and mrindependent, both of whom are ranked in the top 1% of our community.
Just three days ago, UltraLong warned that the company was on fragile financial footing:
I really don't care how popular natural gas is right now because there aren't enough sticks in the world to shake at Crosstex's massive pile of debt to even put a dent in it. 1.1 billion dollars in debt and a monstrous wave of quarterly losses that would make Captain Ahab proud. Crosstex grossly mismanaged their balance sheet when times were good and got caught with their hand in the cookie jar two years ago. I consider them extremely lucky to have even survived and would consider a pullback all but a certainty from these levels.
In a pitch from one day later, mrindependent echoed that balance sheet bearishness:
I agree that Crosstex Energy has too much debt. The stock price soared in recent months after the company announced a significant asset sale that enabled it to pay down $259 million. Even after the asset sale, the company has approximately $1060 million of remaining debt and its sustainable debt level is only $200 million or so. Since the company consistently generates negative cash flow, I do not believe that Crosstex will survive. If the company somehow manages to continue as a going concern, I do not expect much "free cash flow" for shareholders.
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