Skip to main content

NEW YORK (TheStreet) -- Comstock Resources (CRK) - Get Comstock Resources, Inc. Report stock is decreasing by 11.46% to $2.86 after U.S. crude oil prices fell under $43 a barrel on a stronger dollar and fears of increasing stockpiles.

WTI crude is down 2.47% to $42.23 per barrel, while Brent crude is down 1.59% to $48.87 per barrel, according to the index.

The dollar rose after U.S. retail sales recovered in July and weekly jobless claims decreased, Reuters reports.

Even though U.S. oil production has fallen recently, stockpiles may rise after a BP (BP) - Get BP Plc Report refinery was shut down due to malfunctions.

Scroll to Continue

TheStreet Recommends

"The BP mishap could result in a backup in inventories in both Patoka [Illinois] and Cushing [Oklahoma] and result in a build in Cushing crude oil inventories in the coming weeks," consultant Dominick Chirichella said to Reuters.

Separately, TheStreet Ratings team rates COMSTOCK RESOURCES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate COMSTOCK RESOURCES INC (CRK) a SELL. This is driven by some concerns, 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, disappointing return on equity, weak operating cash flow, generally high debt management risk 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 6838.4% when compared to the same quarter one year ago, falling from $1.17 million to -$78.50 million.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, COMSTOCK RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $60.86 million or 36.43% 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.
  • Currently the debt-to-equity ratio of 1.76 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, CRK has managed to keep a strong quick ratio of 1.59, which demonstrates the ability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 93.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 8650.00% 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: CRK Ratings Report