NEW YORK (TheStreet) -- Shares of Oasis Petroleum (OAS) - Get Report are falling by 3.31% to $11.99 in early afternoon trading on Wednesday, as some energy stocks take a hit from the decline in oil prices today.
Oil prices jumped yesterday on heightened tensions in the Middle East, but are reversing those gains as investor concern shifts back to the global supply glut.
Oasis Petroleum is a Houston-based acquirer and developer of oil and natural gas resources in North Dakota and Montana.
Data released by the Energy Information Administration showed that crude oil inventories grew by 1 million barrels last week, in line with the 1.1 million barrel increase analysts had been expecting.
Crude stockpiles typically fall in December, however "There's a real fear out there of another repeat of last year when you had a stock build in December" ICAP broker Scott Shelton told the Wall Street Journal.
"People are nervous about it, but this report will give bulls some comfort that we'll see something a little more seasonal," Shelton continued.
Separately, TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate OASIS PETROLEUM INC (OAS) 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 reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 64.09%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of 13.71% significantly outperformed against the industry.
- OAS, with its decline in revenue, slightly underperformed the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 46.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, OAS has a quick ratio of 0.51, 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: OAS
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.