NEW YORK (TheStreet) -- Shares of Noble Corp. (NE) - Get Report were gaining 2.3% to $13.29 on Friday as oil prices ticked higher after the number of active oil rigs in the U.S. fell for the ninth week in a row.
WTI crude oil for December delivery was up 1.17% to $46.60 a barrel Friday afternoon, and Brent crude oil for December delivery was up 1.54% to $49.55 a barrel.
Oilfield services company Baker Hughes (BHI) said the number of active oil rigs in the U.S. fell by 16 rigs in the week. The decrease brings the U.S. rig count to 578 rigs, the lowest level since June 2010.
The lower rig count is a sign that low prices are keeping oil companies from producing as much crude, and could signal lower production over the next several months, according to Reuters.
Noble Corp. is a major contract driller of oil and natural gas based in Baar, Switzerland.
TheStreet Ratings team rates NOBLE CORP PLC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate NOBLE CORP PLC (NE) 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 increase in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 155.6% when compared to the same quarter one year prior, rising from $127.49 million to $325.81 million.
- The gross profit margin for NOBLE CORP PLC is rather high; currently it is at 60.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.88% significantly outperformed against the industry average.
- NOBLE CORP PLC 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, NOBLE CORP PLC swung to a loss, reporting -$0.67 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus -$0.67).
- 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 Energy Equipment & Services industry and the overall market on the basis of return on equity, NOBLE CORP PLC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- NE'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 39.57%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full analysis from the report here: NE