WTI crude oil for May delivery was down 3% to $49.90 Friday morning and Brent oil for May delivery was down 2.4% to $57.77 a barrel.
Oil prices were falling after bombing in Yemen continued overnight, but fears that the conflict would disrupt oil exports lessened, according to Reuters. Oil prices increased Thursday after airstrikes in Yemen sparked fears that it could disrupt world oil supplies.
Goldman Sachs said that the bombing will likely have little effect on oil supplies as Yemen was a small crude exporter and tankers can avoid passing the country on their way to other ports, according to Reuters.
TheStreet Ratings team rates SANDRIDGE ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SANDRIDGE ENERGY INC (SD) a SELL. This is driven by multiple 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 generally high debt management risk, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Currently the debt-to-equity ratio of 1.65 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, SD has a quick ratio of 0.65, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Net operating cash flow has decreased to $225.43 million or 17.61% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SANDRIDGE ENERGY INC has marginally lower results.
- SD'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 75.40%, 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.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SANDRIDGE ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- SANDRIDGE ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SANDRIDGE ENERGY INC turned its bottom line around by earning $0.34 versus -$1.28 in the prior year. For the next year, the market is expecting a contraction of 173.5% in earnings (-$0.25 versus $0.34).
- You can view the full analysis from the report here: SD Ratings Report