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NEW YORK (TheStreet) -- Emerald Oil (EOX) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate EMERALD OIL INC (EOX) a SELL. This is driven by multiple weaknesses, 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 unimpressive growth in net income and generally disappointing historical performance in the stock itself."

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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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from -$1.72 million to -$1.95 million.
  • EOX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.95%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EMERALD OIL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EMERALD OIL INC is currently very high, coming in at 70.32%. Regardless of EOX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EOX's net profit margin of -7.92% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly increased by 426.00% to $9.67 million when compared to the same quarter last year. In addition, EMERALD OIL INC has also vastly surpassed the industry average cash flow growth rate of -4.89%.
  • You can view the full analysis from the report here: EOX 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.