NEW YORK (TheStreet) -- Shares of Suncor Energy (SU) - Get Suncor Energy Inc. Report were gaining 5.9% to $27.51 on Thursday afternoon, as oil prices were rebounding from recent losses.

WTI crude oil for October delivery was up 8.55% to $41.90 a barrel Thursday afternoon, and Brent crude oil for October delivery was up 7.51% to $46.38 a barrel.

Crude oil prices were rising due to a rally in equity markets and an unexpected decrease in U.S. crude oil inventories, according to Reuters. World stock markets recovered on hopes that the Chinese governments' actions to stimulate the economy will pay off.

On Wednesday, the U.S. Energy Information Administration said that U.S. crude inventories decreased by 5.5 billion barrels in the week ending August 21, the largest single-week decline since June. Analysts surveyed by Reuters expected inventories to increase by 1 million barrels.

TheStreet Recommends

Suncor Energy is an energy company based in Calgary, Alberta that specializes in the production of synthetic crude from oil sands.

Separately, TheStreet Ratings team rates SUNCOR ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNCOR ENERGY INC (SU) 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, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow."

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 Oil, Gas & Consumable Fuels industry. The net income increased by 245.5% when compared to the same quarter one year prior, rising from $211.00 million to $729.00 million.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • Despite the weak revenue results, SU has outperformed against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 22.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, SUNCOR ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SU'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 34.23%, 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: SU Ratings Report