NEW YORK (TheStreet) -- In an Oct. 14 update, we said we would like to buy Action Alerts PLUS holding EOG Resources (EOG) - Get Report closer to $80. Prices for EOG dipped this morning to $80.05 this morning and have so far bounced off that early low.
This pullback for EOG, chart above, brings prices down towards the rising 50-day moving average and the August and September highs. Readers who are hesitant to buy this pullback should consider buying the first up day for EOG. A sell-stop below the 50-day moving average looks like a good risk point.
Separately, TheStreet Ratings team rates EOG RESOURCES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate EOG RESOURCES INC (EOG) 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 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 weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for EOG RESOURCES INC is currently very high, coming in at 73.31%. Regardless of EOG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.21% trails the industry average.
- EOG, with its decline in revenue, slightly underperformed the industry average of 34.1%. Since the same quarter one year prior, revenues fell by 41.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has significantly decreased to $887.37 million or 54.13% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EOG RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: EOG