NEW YORK (TheStreet) --Shares of Oasis Petroleum (OAS) - Get Oasis Petroleum Inc. Report are gaining by 8.45% to $10.27 in early afternoon trading on Friday, as oil prices rally for a second consecutive day driving some energy stocks into the green as well.
Oil is continuing to rally from Thursday's trading session after reaching six-and-a-half year lows earlier this week on strong U.S. economic growth, recovering equity markets and reports of low crude supplies from Nigeria, Reutersreports.
Crude oil (WTI) is rising by 5.55% to $44.92 per barrel and Brent crude is higher by 4.98% to $49.93 per barrel this afternoon, according to the CNBC.com index.
"The extent of yesterday's rally indicates just how negative market sentiment must have been," Commerzbank analysts said in a note, The Wall Street Journal reports. "In the short term, Brent could rise to $50 per barrel and [U.S. oil prices] to $45 per barrel."
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 deteriorating net income, generally higher debt management risk and disappointing return on equity."
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 66.89%. 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 -23.13% significantly underperformed when compared to the industry average.
- 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. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash 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 Ratings Report