NEW YORK (TheStreet) -- Genie Energy (GNE) - Get Report stock is gaining by 12.36% to $12 in pre-market trading on Thursday, after the company confirmed it has found massive oil reserves in the Golan Heights, Fox News reports.
The quality and quantity of oil will not be apparent until the oil is extracted, which could be a while from now, according to Fox News.
Syria's ongoing civil war, which is occurring near the potential oil feed, also could complicate development, Fox News adds.
"We are talking about a strata which is 350 meters thick and what is important is the thickness and the porosity," the company's chief geologist, Yuval Bartov, told Fox News. "On average in the world, strata are 20-30 meters thick, so this is ten times as large as that, so we are talking about significant quantities. The important thing is to know the oil is in the rock and that's what we now know."
Genie Energy, based in Newark, NJ, operates as a retail energy provider and a developer of an oil and gas exploration company.
Separately, TheStreet Ratings team rates GENIE ENERGY LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate GENIE ENERGY LTD (GNE) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- GNE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.93, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Electric Utilities industry average. The net income increased by 7.6% when compared to the same quarter one year prior, going from -$4.87 million to -$4.50 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 Electric Utilities industry and the overall market, GENIE ENERGY LTD'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 $5.83 million or 74.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: GNE