NEW YORK (TheStreet) -- Shares of Denbury Resources (DNR) - Get Report are falling by 6.41% to $3.36 in mid-morning trading on Tuesday, as the retreat in oil prices drives some energy and related stocks into the red today.
Oil prices are declining, extending losses into a third week, due to concerns regarding the global supply glut and inventory data out of the U.S. that is expected to show another rise in crude stocks, Reuters reports.
Denbury Resources is a Plano, TX-based independent oil and natural gas company.
Crude oil (WTI) is slumping by 2.43% to $42.91 per barrel this morning and Brent crude is lower by 1.87% to $46.65 per barrel, according to the CNBC.com index.
Commercial crude supplies in the U.S. are expected to have risen for a fifth consecutive week, Reuters added, by an average of 3 million barrels. This would bring the total to 479.6 million barrels as of the week ended October 23.
U.S. congressional leaders had suggested selling 58 million barrels of oil from the emergency reserves in order to help pay for a budget deal, which is also weighing on prices today.
Separately, TheStreet Ratings team rates DENBURY RESOURCES INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate DENBURY RESOURCES INC (DNR) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, disappointing return on equity, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 1980.6% when compared to the same quarter one year ago, falling from -$55.20 million to -$1,148.50 million.
- 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, DENBURY RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $288.96 million or 12.39% when compared to the same quarter last year. Despite a decrease in cash flow of 12.39%, DENBURY RESOURCES INC is in line with the industry average cash flow growth rate of -19.46%.
- DNR's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that DNR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.70 is low and demonstrates weak liquidity.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1950.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: DNR