WTI crude oil for March delivery was falling 1.5% to $49.28 a barrel Wednesday morning, and Brent crude oil for March delivery was falling 2.4% to $55.08 a barrel.
Oil prices were falling Wednesday as U.S. crude oil stockpiles grew to a new record high, according to The Wall Street Journal. Crude oil stockpiled grew by 4.9 million barrels to 417.9 million barrels in the week that ended on Feb. 6, the U.S. Energy Information Administration said, above analysts' expected gain of 4 million barrels.
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"U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years," the EIA said in its report.
TheStreet Ratings team rates MIDSTATES PETROLEUM CO INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MIDSTATES PETROLEUM CO INC (MPO) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 4.99 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, MPO has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity 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, MIDSTATES PETROLEUM CO INC's return on equity significantly trails that of both the industry average and the S&P 500.
- MPO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 69.66%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- MIDSTATES PETROLEUM CO INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MIDSTATES PETROLEUM CO INC reported poor results of -$5.46 versus -$2.53 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus -$5.46).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 416.0% when compared to the same quarter one year prior, rising from -$23.61 million to $74.60 million.
- You can view the full analysis from the report here: MPO Ratings Report