NEW YORK (TheStreet) -- Encana Corp. (ECA) - Get Report shares closed Friday's trading session up 0.2% to $7.64 as oil prices showed gains. The Baker Hughes (BHI) report showed that the oil rig count dropped for the ninth week in a row.
For the week ended October 30, the total rig count was 578, as U.S. drillers removed 16 rigs, Reuters reports.
Crude oil (WTI) is increasing 0.72% to $46.39 a barrel and Brent crude is jumping 1.23% to $49.40 a barrel, according to the CNBC.com.
This comes after oil prices earlier today fell on oversupply concerns.
Based in Canada, Encana engages in the development, exploration, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the U.S.
Separately, TheStreet Ratings team rates ENCANA CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate ENCANA CORP (ECA) 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 deteriorating net income, disappointing return on equity, weak operating cash flow, 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 694.1% when compared to the same quarter one year ago, falling from $271.00 million to -$1,610.00 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 Oil, Gas & Consumable Fuels industry and the overall market, ENCANA CORP'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 $298.00 million or 61.14% 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 616.21% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- ENCANA 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENCANA CORP increased its bottom line by earning $4.59 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 104.1% in earnings (-$0.19 versus $4.59).
- You can view the full analysis from the report here: ECA