Oil prices reversed their earlier gains today after an Energy Information Administration report today showed that crude inventories rose 1 million barrels last week, The Wall Street Journal reported. The rise was lower than analysts' expectations for an increase of 1.1 million barrels.
"We saw a three-session rally because of rising geopolitical tension, but that rally was snapped when investors reminded themselves of the fundamentals which are very bearish at the moment, based on oversupply," Kash Kamal, a senior analyst at Sucden Financial, told the Journal.
Crude oil (WTI) is down 0.33% to $42.73 per barrel and Brent oil is declining 0.78% to $45.76 per barrel, according to the CNBC.com index.
Based in Denver, CO, Whiting Petroleum is an oil and natural gas company that operates in the Rocky Mountains and Permian Basin.
Separately, TheStreet Ratings team rates WHITING PETROLEUM CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate WHITING PETROLEUM CORP (WLL) a SELL. This is driven by some concerns, 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 feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WHITING PETROLEUM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WHITING PETROLEUM CORP reported lower earnings of $0.80 versus $3.07 in the prior year. For the next year, the market is expecting a contraction of 169.8% in earnings (-$0.56 versus $0.80).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1280.6% when compared to the same quarter one year ago, falling from $157.98 million to -$1,865.11 million.
- The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, WLL 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WHITING PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 792.42% compared to the year-earlier 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.
- You can view the full analysis from the report here: WLL
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.