TSC Ratings' Updates: Apache

The following ratings changes were generated on Friday, Feb. 20.

We've downgraded independent energy company Apache(APA Quote) from buy to hold. Strengths include its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find a decline in the stock price during the past year, deteriorating net income and disappointing return on equity.

Apache's 0.3 debt-to-equity ratio is very low but is still higher than the industry average. Its gross profit margin of 63.1% is rather high, though it has decreased from the same period last year. The net profit margin of -156.9% significantly underperformed the industry average. Return on equity has greatly decreased since the year-ago quarter, a signal of major weakness within the corporation and an underperformance of both the industry average and the S&P 500. ...