NEW YORK (TheStreet) -- Shares of Gran Tierra Energy (GTE) - Get Report rose 5.26% to $3.71 in afternoon trading Wednesday as oil prices climbed after the U.S Energy Information Administration (EIA) reported a decline in U.S. oil production.
The EIA said Wednesday that U.S. production declined by 18,000 barrels per day (bpd) last week, a decline of 0.19%.
But U.S. crude stockpiles rose by 5.3 million barrels last week to a record 489 million barrels, which nearly doubled the increase of 2.9 million barrels expected by analysts polled by Thomson Reuters.
Brent crude was up 1.3% to $62.89 at 11:58 a.m., while WTI crude dipped 0.19% to $56.50, according to CNBC.
The Calgary-based Gran Tierra Energy was founded in June 2005.
CIBC downgraded the stock to "sector perform" from "sector outperform" on Tuesday.
Separately, TheStreet Ratings team rates GRAN TIERRA ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GRAN TIERRA ENERGY INC (GTE) a SELL. This is driven by several 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 feeble growth in its earnings per share, deteriorating net income, 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:
- GRAN TIERRA ENERGY INC 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. During the past fiscal year, GRAN TIERRA ENERGY INC swung to a loss, reporting -$0.51 versus $0.64 in the prior year.
- 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 2064.4% when compared to the same quarter one year ago, falling from -$12.47 million to -$269.79 million.
- 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, GRAN TIERRA ENERGY 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 $68.82 million or 59.93% 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 50.21%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 954.54% 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: GTE Ratings Report