Oil prices were strengthened by a surprising fall of U.S. crude inventories, Reuters reports. Inventories in the U.S. declined by 3.6 million barrels last week to 486.7 million, according to data from the American Petroleum Institute on Tuesday.
Crude oil (WTI) is gaining by 2.49% to $37.04 per barrel this morning and Brent crude is increasing by 2.19% to $36.92 per barrel, according to the CNBC.com index.
However, oil prices are still near multi-year lows as oversupplies persist and the Organization of the Petroleum Exporting Countries lowered its demand outlook for exports, Reuters reports.
OPEC warned that demand for its crude oil would be lower in 2020 than in 2016 because rival producers are proving stronger than expected, Reuters reports. The organization predicted demand for 30.7 million barrels per day in 2020 compared to 30.9 million in 2016, Reuters noted.
The Phoenix-based natural resource company has an industry portfolio of mineral assets, oil and natural gas resources and a production profile.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate FREEPORT-MCMORAN INC as a Sell with a ratings score of D. 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 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 Metals & Mining industry. The net income has significantly decreased by 793.8% when compared to the same quarter one year ago, falling from $552.00 million to -$3,830.00 million.
- Currently the debt-to-equity ratio of 1.89 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash 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 Metals & Mining industry and the overall market, FREEPORT-MCMORAN INC'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 $822.00 million or 57.32% 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 72.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 775.47% 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: FCX