TSC Ratings' Updates: ImClone
Seeing a downgrade from hold to buy was Anadarko Petroleum (APC). The Woodlands, Texas-based company is an explorer and producer of oil and natural gas properties. 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.
Net operating cash flow has increased to $438 million, or by 22% when compared year over year. In addition, Anadarko has also vastly surpassed the industry average cash flow growth rate of -31.26%.
The gross profit margin for Anadarko is rather high; currently, it is at 53.1%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1% trails the industry average.
Revenue fell significantly faster than the industry average of 32.2%. Since the same quarter one year prior, revenues fell by 21%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the overall oil, gas and consumable fuels industry. Net income has significantly decreased when compared to the same quarter one year ago, falling by 99.2% from $3.02 billion to $23 million. Return on equity, or ROE, has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the oil, gas and consumable fuels industry and the overall market, Anadarko's ROE is significantly below that of the industry average and is below that of the S&P 500. Anadarko had been rated a buy since Aug. 4, 2006.
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