NEW YORK (TheStreet) -- Shares of Chesapeake Energy (CHK) - Get Chesapeake Energy Corporation Report are rising by 4.09% to $5.35 in mid-morning trading on Tuesday, as the rally in oil prices drives some stocks within the energy sector higher this morning.
A softer dollar and reports that Turkey has shot down a Russian jet over Syria is giving oil prices a boost this morning.
Crude oil (WTI) is climbing by 3.45% to $43.19 per barrel this morning and Brent crude is soaring by 3.35% to $46.33 per barrel, according to the CNBC.com index.
Chesapeake Energy is an Oklahoma City-based producer of natural gas, oil and natural gas liquids in the U.S.
Authorities in Turkey did not give the nationality of the jet, the Wall Street Journal reports, however Russia announced separately that one of its jets had gone down in the region. This is adding to concerns regarding the continuing conflict in the Middle East, the most abundant oil producing regions in the world.
Also adding to the rise in oil prices are comments by Saudi Arabia that the country is ready to cooperate with other producers in order to stabilize prices, the Journal noted.
Separately, TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate CHESAPEAKE ENERGY CORP (CHK) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 803.9% when compared to the same quarter one year ago, falling from $661.00 million to -$4,653.00 million.
- The debt-to-equity ratio is very high at 2.71 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CHK has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover 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, CHESAPEAKE ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $318.00 million or 72.63% 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 76.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2823.07% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: CHK
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.