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SandRidge Energy (SD) Hits One-Year High Today After Last Week's Gains

NEW YORK (TheStreet) -- Sandridge Energy  (SD) hit a one-year high on Monday as the company continued its gains from late last week after Jim Cramer spoke bullishly about the stock on CNBC's Mad Money on Wednesday evening.

The stock hit a high of $6.98 for the day as of 3 p.m. More than 12.5 million shares had changed hands, which surpassed the average volume of 8,560,540.

Cramer said on the show that Wall Street seems to hate the stock even though the oil and natural gas exploration company's turnaround is in plain sight.

"The former CEO practically ran the company into the ground. Because of mismanagement and other factors, shares tumbled from $67 in 2008 to the single digits. And the stock never really bounced back," Cramer said. He added "because SandRidge is so hated by Wall Street, the analysts can't see the incredible turnaround happening in front of their faces."

Cramer went on to note "since new CEO James Bennett took over, SandRidge has delivered three consecutive quarters where the company beat the estimates and raised guidance." 

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Separately, TheStreet Ratings team rates SANDRIDGE ENERGY INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SANDRIDGE ENERGY INC (SD) 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 solid stock price performance, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 106.6% when compared to the same quarter one year prior, rising from -$287.90 million to $19.08 million.
  • Powered by its strong earnings growth of 101.58% and other important driving factors, this stock has surged by 33.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SANDRIDGE ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SANDRIDGE ENERGY INC reported poor results of -$1.27 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$1.27).
  • Currently the debt-to-equity ratio of 1.75 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, SD's quick ratio is somewhat strong at 1.25, demonstrating the ability to handle short-term liquidity needs.
  • Return on equity 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SANDRIDGE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SD Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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