NEW YORK (TheStreet) -- Shares of Goodrich Petroleum (GDP) - Get Report are higher by 5.78% to $4.49 in afternoon trading on Friday, as oil prices climb after Baker Hughes (BHI) reported that the number of U.S. rigs actively drilling for oil and natural gas as of today decreased by 43 rigs to 1,267 rigs, MarketWatch reports. The rig count is lower by 502 year over year.
WTI crude for April delivery is up 2.41% to $49.33 a barrel as of 3:30 p.m. ET on the New York Mercantile Exchange, while Brent crude for April delivery is also up 3.46% to $62.13 a barrel today.
Brent is headed for its first monthly gain since July of 2014, helped by strong investor inflows as well as an improving demand outlook and supply outages, according to Reuters.
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This week, the spread between Brent and WTI gapped wider. Brent is getting a boost by factors like positive euro zone and Chinese data, as well as supply disruptions in Libya, according to Reuters.
Houston, TX-based Goodrich Petroleum is an independent oil and natural gas company. The company is engaged in the exploration, development and production of oil and natural gas.
The company owns working interests in about 436 producing oil and natural gas wells in 44 fields throughout eight states.
Separately, TheStreet Ratings team rates GOODRICH PETROLEUM CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOODRICH PETROLEUM CORP (GDP) a SELL. This is driven by a few notable 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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
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 194.3% when compared to the same quarter one year ago, falling from -$27.09 million to -$79.71 million.
- The debt-to-equity ratio is very high at 2.84 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.41, 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 Oil, Gas & Consumable Fuels industry and the overall market, GOODRICH PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 71.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 120.22% 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.
- GOODRICH PETROLEUM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GOODRICH PETROLEUM CORP reported poor results of -$2.99 versus -$2.48 in the prior year. This year, the market expects an improvement in earnings (-$1.97 versus -$2.99).
- You can view the full analysis from the report here: GDP Ratings Report