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NEW YORK (TheStreet) -- Shares of Ensco (ESV) were gaining 5.5% to $31.56 Friday as oil prices rebounded and recovered from prices near five-year lows.

Brent crude oil for February delivery was gaining 2.2% to $60.57 a barrel Friday morning, and WTI crude oil for January delivery was gaining 2.5% to $55.45 a barrel.

Despite the slight recovery oil prices were still on track for a fourth week of declines after OPEC decided to not reduce its production rate, according to Reuters.

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"Following the long and steep decline in oil prices, we have seen some buying interest in recent days," Newedge commodity sales manager Ken Hasegawa told the publication. "But there is still a lot of selling pressure."

TheStreet Recommends

TheStreet Ratings team rates ENSCO PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENSCO PLC (ESV) 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 growth in earnings per share, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ENSCO PLC has improved earnings per share by 16.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ENSCO PLC increased its bottom line by earning $6.04 versus $5.24 in the prior year. This year, the market expects an improvement in earnings ($6.12 versus $6.04).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues slightly increased by 8.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ESV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.03 is high and demonstrates strong liquidity.
  • Net operating cash flow has declined marginally to $601.90 million or 7.14% 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 Energy Equipment & Services industry and the overall market, ENSCO PLC'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: ESV Ratings Report

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